PER'S  HISTORICAL  SERIES 

Edited  by  Guy  Stanton  Ford 


AN  INTRODUCTION  TO 
ECONOMIC  HISTORY 

By  Norman  Scott  Brien  Gras 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

RIVERSIDE 


GIFT  OF 


Dr.   r- or  don  Vatkins 


INTRODUCTION 
TO  ECONOMIC  HISTORY 


AN 

INTRODUCTION  TO 
ECONOMIC  HISTORY 


BY 


N.  S.  B.  GRAS,  Ph.D, 

Professor  of  Economic  History 
University  of  Minnesota 


HARPER  &  BROTHERS  PUBLISHERS 
NEW  YORK  AND  LONDON 

1922 


n  u 

G7 


AN  INTRODUCTION  TO 
ECONOMIC    HISTORY 

Copyright,  1922 

By  Harper  &  Brothers 

Printed  in  the  U.  S.  A. 

First  Edition 


To 
EDWIN    FRANCIS    GAY 

Scholar  and  Executive 


TABLE  OF  CONTENTS 
CHAPTER  I 

COLLECTIONAL  ECONOMY 

1.  Economic  History:  primitive,  3;  modern,  3. 

2.  Collectors:  means  of  livelihood,  4;  collectors,  4;  effect  of 

latitude,  4;  man  and  nature,  4;  economy,  5. 

3.  Dawn  of  History:  Egypt,  5  ;  history  and  description,  6. 

4.  Collectors  in  Antiquity:    locust-eaters,  6;    Germans,  6; 

India,  7 ;  evidence  of  archaeology,  7. 

5.  Collectors  in  the  Modern  Period:  Veddahs,   7;   Mada- 

gascar, 8 ;  Eskimos,  8 ;  American  Indians,  9 ;  Indians  of 
British  Columbia,  9;  causes  of  backwardness,  10. 

6.  Survival  of  Collectional  Pursuits :  Skallagrim,  1 1 ;  Eng- 

lish forests,  ii ;  collectional  pursuits  of  to-day,  n. 

7.  The   Food  of   Collectors:   food   elements,    12;  balanced 

diet,  12;  herbivorous  man,  12;  carnivorous  man,  13; 
modern  and  primitive  men,  13;  bad  side  of  primitive 
man's  diet,  14;  uneven  supplies,  14;  storage  for  con- 
sumption, 14. 

8.  General  Attainments  of  the  Collectors:  work  of  men  and 

women,  15;  religion,  15;  art,  16;  customs,  16;  village 
groups,  17;  area  required  for  production,  17;  variation 
in  culture,  18;  the  stone  and  other  ages,  18;  lower  col- 
lectors, 18;  higher  collectors,  18. 

9.  Suggestions  for  Further  Study,  19. 

10.  Notes  to  Chapter  I,  21. 

CHAPTER  II 

CULTURAL    NOMADIC    ECONOMY 

11.  The  Cultural   Nomads:  earliest  economic  cultures,   23; 

conquest  over  nature,  23;  wandering  about,  24:  collec- 
tion and  cultivation  combined,  24. 


TABLE  OF  CONTENTS 

12.  Animal  Culture:  herders,  24;  Jews,  25;  Arabs,  25;  Bed- 

ouins, 26;  Massagetae,  26;  Alani,  26;  Scythians  of 
the  plain,  26 ;  Huns,  27 ;  mounted  nomads,  28 ;  North 
Africa,  28;  Algerian  nomads,  29;  southwestern  Africa, 
29 ;  southeastern  Africa,  30 ;  southern  India,  30 ;  Lapps, 
30;  Russia,  31 ;  location  of  pastures,  31 ;  seasonal  move- 
ments, 32;  migrations,  32;  Jenghis  Khan,  33;  trade, 
33;  food,  34. 

13.  Plant  and  Animal  Culture:  planting,  34;  Jews,  35;  love 

of  roving,  36;  Germans,  36;  Ethiopians,  37;  Algeria, 
37;  India,  37;  southern  Russia,  37. 

14.  Exclusively  Plant  Culture:  North  American  Indians,  38; 

others  without  flocks  and  herds,  38;  Australia,  39. 

15.  General  Attainments  of  Cultural  Nomads:  food,  39;  stor- 

age for  production,  39;  property,  40;  family,  40;  variety 
in  work,  40;  marriage,  41;  slavery,  41;  division  ot 
employments,  42 ;  summary  of  economic  activity,  42. 

1 6.  Suggestions  for  Further  Study,  42. 

17.  Notes  to  Chapter  II,  44. 

CHAPTER  HI 

SETTLED  VILLAGE   ECONOMY 

1 8.  Settling  of  the  Village  Group:  process  of  settlement,  49; 

nomadic  groups  settle  down,  49;  early  village  a  closely 
knit  unit,  50;  village  as  a  territorial  area,  50;  essential  • 
of  civilization,  50;  process  of  settlement,  51 ;  in  ancient 
times,  51;  in  western  Europe,  51;  Slavs,  52;  Algerian 
"Arabs,"  52;  causes  of  settlement,  52;  place  of  settle- 
ment, 53. 

19.  Form  of  the  Settled  Village:  nucleated  or  compact  vil- 

lage, 53  (round,  53;  defense,  53;  Berber  village,  55; 
Chinese  village,  55;  Indian  village,  55)  ;  non-nucleated 
village,  56  (long-street  village,  56;  hamlet  groups,  58; 
variations  and  combinations,  58;  sub-villages,  58)  ;  fac- 
tors determining  form,  58  (peace  and  plant  cultivation, 
59;  public  works,  60;  soil,  60)  ;  normal  village,  60; 


TABLE  OF  CONTENTS 

scattered  homesteads,  61 ;  natural  environment  as  a 
factor  in  economic  history,  61. 

20.  First  Phase  of  Settled  Village  Economy:  the  Free  Vil- 

lage :  two  phases  of  village  economy,  62 ;  classes  in  the 
free  village,  62 ;  slaves,  62 ;  freemen  typical,  63  ;  animal 
and  plant  culture,  63 ;  village  pasture,  63 ;  distant  pas- 
tures, 64;  plant  cultivation,  64  (in  nucleated  village, 
64;  Kelts  of  Gaul,  Ireland,  and  Wales,  65;  North 
American  Indians,  66;  free  village  in  Africa,  66); 
forces  determining  cultivation,  67  ;  health  in  the  village, 
67 ;  peace  in  the  villages,  68 ;  birth  of  agriculture,  68 ; 
animal  and  plant  culture  combined,  68;  animals  used 
in  cultivation,  69;  two  types  of  agriculture,  69;  fallow- 
ing land,  69;  two-  and  three-field  systems,  70;  arrested 
development,  70. 

21.  Second  Phase  of  Settled  Village  Economy:  the  Dependent 

Village:  war  and  possession,  70;  villages  open  to  easy 
conquest,  71  ;  results  of  conquest,  71 ;  defensive  measures 
lead  to  aristocracy,  7 1 ;  commendation  of  persons  and 
lands,  72  ;  lord  exploits  villagers,  73  ;  village  court,  73  ; 
feudalism,  73;  lord's  demesne,  74;  manor,  74;  Roman 
villa,  74;  summary  statement  of  village  subjection,  75; 
effect  of  the  unfree  village  on  agriculture,  75 ;  steps  in 
the  formation  of  the  manor,  76;  Anglo-Saxons,  about 
45O-75O,  76;  an  English  manor,  1086,  76;  manorial 
growth,  78;  eastern  Europe,  78;  ancient  period,  78; 
genesis  and  history,  79. 

22.  General   Cultural    Attainments    of    the    Settled    Village 

Stage :  general  economic  situation,  79 ;  storage,  79 ;  vil- 
lage industries,  80;  village  trade,  80;  village  markets, 
8 1 ;  village  government,  81 ;  slaves  in  villages,  82 ;  early 
nobles  in  villages,  83 ;  worship,  83 ;  religion,  84 ;  art, 
84 ;  dependent  classes,  85 ;  vermin,  85 ;  lack  of  indi- 
vidualism, 85. 

23.  Outstanding  Communities:  Urban  Villages:  urban  villages 

in  ancient  Egypt,  86 ;  among  the  early  Jews,  86 ;  ancient 
Greece,  87 ;  among  the  Gauls,  88 ;  among  the  Germans, 
88 ;  in  West  Africa,  88 ;  in  England,  89 ;  in  Germany, 


TABLE  OF  CONTENTS 

early  lOth  century,  89;  markets  in  urban  villages,  90; 
village  agglomerations,  90;  Rome,  91 ;  relation  of  urban 
to  rural  villages,  91. 

24.  Suggestions  for  Further  Study,  92, 

25.  Notes  to  Chapter  III,  94. 

CHAPTER  IV 

TOWN  ECONOMY 

26.  The  Economic  Town  and  Town  Economy :  town  and  vil- 

lage, 104;  trade  omnipresent,  104;  trade  in  the  settled 
village,  104;  market  villages,  105;  birth  of  the  town, 
105;  specialized  trader,  105;  store,  105;  two  trade 
tendencies,  106;  location  of  towns,  107;  appearance  of 
a  town,  107;  area  around  the  town,  107;  area  around 
the  town  not  closed  to  the  rest  of  the  world,  109; 
definition  of  town  economy,  109;  town  and  villages, 
109;  town  politically  considered,  no. 

27.  When  Towns  Developed:  Struggle  between  Town  and 

Village:  town  wins  as  against  the  village,  no;  village 
wins,  no;  historiography,  110;  Egypt,  in;  Babylonia, 
in;  towns  of  eastern  Mediterranean,  1 1 1 ;  towns  in 
Italy,  in;  Rome,  112;  Gaul,  112;  Britain,  112;  Ger- 
many, 113;  town  cycles,  113;  China,  113;  date  of 
town  beginnings,  114. 

28.  Created  Towns:   Mediterranean  colonized   towns,    114; 

reasons  for  new  towns,  116;  German  towns,  117; 
towns  in  America,  117;  founders  of  towns,  117;  Greek 
towns,  118;  medieval  towns,  118;  founders  of  towns 
in  America,  118;  town  develops  without  plan,  118. 

29.  Form  of  the  Town:  compact  in   form,   119;  churches, 

castle,  market  place,  119;  town  markets,  119;  suburbs, 
119;  ghettos,  nth  to  1 9th  century,  121. 

30.  The  Early  Town :  Commercial :  commerce,  not  manufac- 

ture, makes  the  town,  121 ;  Russian  towns,  121;  early 
town  merchants,  122;  articles  of  town  trade,  122;  mer- 
chants not  servile  but  free,  1 23 ;  manors  become  towns, 
123;  charters,  especially  beginning  the  loth  century, 


TABLE  OF  CONTENTS 

123;  merchants  and  self-government,  124;  typical  up- 
rising in  Germany,  124;  southern  France,  about  1107, 
124;  town  patricians,  125;  London,  Cambridge,  Ex- 
eter, 125;  factions  in  Florence,  126;  Roman  patricians, 
126;  town  agriculture,  127;  patricians  and  merchants 
in  hostility,  128;  patricians  and  merchants  at  peace, 
128;  a  young  German  merchant,  128;  temporary  asso- 
ciation, 129;  permanent  associations,  129;  Hanseatic 
League,  131;  Hanseatic  counters,  131;  League's  decline, 
132;  commercial  morality,  132;  maritime  codes,  132; 
commercial  monopoly,  132;  public  works,  133;  trade 
units,  133;  town  seeks  settlers,  133. 

31.  The  Later  Town:  Commercial  and  Industrial:  commer- 
cial town  takes  on  manufactures,  133;  manufacture  for 
use,  134;  manufacture  for  sale,  134;  Rome  and  Athens 
contrasted,  134;  medieval  towns,  135;  manufactures  of 
a  town,  135;  crafts,  135;  Roman  blacksmith,  136; 
localization  of  crafts  in  the  town,  136;  craft  gild,  136; 
the  German  Zunftzwang,  137;  craft  jealous  of  craft, 
137 ;  one  craft  dominates  others,  138 ;  greater  and  lesser 
crafts,  139;  ranks  within  the  gild,  139;  classes  within 
the  town,  139;  patricians,  139;  merchants,  southern 
Germany,  140;  Dick  Whittington,  140;  new  class  of 
merchants,  141;  where  and  how  merchants  sold,  141; 
Trimalchio,  the  merchant,  141 ;  a  Dutch  merchant, 
1 3th  century,  143  ;  a  London  merchant,  143  ;  Medici  of 
Florence,  143;  hucksters,  143;  small  masters,  144; 
laboring  class,  144;  apprentices,  145;  financiers,  145; 
Egibi,  perhaps  600  B.C.,  145;  Atticus,  109-32  B.C., 
146;  less  important  classes,  146;  class  snobbishness, 
146;  political  struggles,  147;  factors  in  political  strug- 
gles, 147;  Florence,  1378,  147;  House  of  Medici,  148; 
Flemish  town  struggles,  148;  French  town  struggles, 
149;  London  institutions,  150;  government  of  London, 
151;  stages  of  political  development,  151;  economic 
basis  of  struggles,  151;  general  economic  regulations, 
152;  Stadtzwang,  Strassenzwang,  Niederlagsrecht, 
152;  gild  regulations,  152;  food  regulations,  153;  bread 
xi 


TABLE  OF  CONTENTS 

and  ale,  154;  leagues  of  towns,  154;  variations  of 
towns,  154;  tov/ns  in  America,  155. 

32.  The  Rural  Part  of  Town  Economy:  town  and  country 

exchange,  156;  rural  manufacture,  157;  town  industry 
moves  countryward,  157;  interdependence  of  town  and 
country,  158;  group  of  manors,  I2th,  I3th,  and  I4th 
centuries,  158;  town  and  manor  exchange  goods,  160. 

33.  Cultural  Attainments  of  the  Town:  economic  contribu- 

tions of  the  town,  161 ;  personal  property  in  towns, 
162 ;  use  of  wealth,  162 ;  urban  sanitation,  163 ;  plagues, 
163;  worldliness,  164;  religion,  164;  individualism, 
165;  opportunities  for  peasants  fleeing  to  town,  165; 
urban  art  and  letters,  166;  miracle  plays,  166;  effect  of 
the  town  on  the  family,  167 ;  urban  poor,  168 ;  charities 
in  towns,  168;  early  and  later  towns  contrasted,  169. 

34.  Outstanding  Towns:  commercial,   169;  industrial,    169; 

political,  169;  cultural,  169;  towns  of  varied  attain- 
ments, 170. 

35.  Suggestions  for  Further  Study,  170. 

36.  Notes  to  Chapter  IV,  173. 

CHAPTER  V 

METROPOLITAN  ECONOMY,  CHIEFLY  IN  ENGLAND 

37.  The  Economic  Metropolis:  the  town  becomes  a  metrop- 

olis, 181 ;  London's  population,  181 ;  London's  trade, 
183;  London's  area  of  supplies,  183;  different  mean- 
ings of  "metropolis,"  183;  requisites  of  a  metropolis, 
184;  terms  for  urban  communities,  185;  terminology 
not  a  safe  guide,  185. 

38.  Metropolitan  Economy:  definition  of  metropolitan  econ- 

omy, 1 86;  intra-metropolitan  trade,  186;  inter-metro- 
politan trade,  186;  submergence  of  towns,  186;  metro- 
politan market,  1 86;  metropolitan  economy,  186. 

39.  First  Phase:  Organizing  the  Market:  wholesaling,  187; 

specialization,  1 88;  exchanges  in  towns,  189;  exchanges 
in  the  metropolis,  189;  bourse,  190;  Royal  Exchange, 
190;  early  exchange  in   Boston,   191;  specialized   ex- 
xii 


TABLE  OF  CONTENTS 

changes,  191;  minor  exchanges,  192;  joint-stock  com- 
panies, 192;  joint-stock  companies  aid  concentration, 
193;  two  kinds  of  trade:  extended  trade,  194,  and 
hinterland  trade,  195;  metropolitan  storage,  196;  spe- 
cialized storage,  197;  new  business  enterprises,  197; 
experiments  in  the  metropolis,  197;  metropolis  and 
grain,  198;  Polish  grain  through  Dantzig,  198;  London 
stores  grain,  198;  competition  for  grain,  199;  no  formal 
metropolitan  organization,  199;  national  unit  over- 
clouds the  metropolitan  unit,  200;  mercantilism,  200; 
town  policy  becomes  mercantilism,  201 ;  mercantilism 
favorable  to  metropolitan  economy,  201 ;  mercantilism 
unfavorable  to  metropolitan  economy,  202 ;  London  and 
the  favorable  balance,  202;  London  and  monopoly, 
203 ;  London  and  manufactures,  203 ;  efficiency  of 
metropolitan  economy  in  storage,  204;  efficiency  in 
transportation,  205;  efficiency  in  use  of  capital,  205; 
efficiency  in  personal  service,  205 ;  personal  motive  and 
public  service,  206 ;  social  and  political  factors  in  metro- 
politan development,  206;  why  does  metropolitan 
economy  come  so  late  ?  207 ;  Babylon,  207 ;  Phoenician 
and  Greek  cities,  207 ;  Alexandria,  207 ;  medieval 
Italian  cities,  208;  Bruges,  208;  Antwerp,  208;  Lon- 
don the  first  typical  metropolis,  208;  London  in  the 
first  phase,  1550-1750,  208. 

40.  Second  Phase:  Industrial  Development:  manufactures  in 
the  metropolis,  209;  raw  products  in  the  metropolis, 
210;  industries  in  the  hinterland,  2IO;  London  hosiery 
industry  moves  to  the  hinterland,  2IO;  London  silk 
industry  moves  to  the  hinterland,  21 1;  hinterland  rivals 
London  in  cutlery,  212;  reasons  for  decentralization  of 
industry,  213;  hinterland  of  London  becomes  indus- 
trial, 214;  Boston's  hinterland  becomes  industrial,  215; 
retail  to  wholesale  handicraft,  215;  wholesale  handi- 
craft to  centralized  industry,  216;  industrial  revolu- 
tion, 216;  industrial  satellites,  216;  industrial  phase  in 
the  metropolitan  development  of  London,  1750-1830, 
217;  metropolitan  economy  and  mercantilism  in  the 


TABLE  OF  CONTENTS 

industrial  phase,  217;  protest  against  industrial  evils, 
218. 

41.  Third  Phase:  Development  of  Transportation:  revolution 

in  transportation  follows  revolution  in  industry,  219; 
streets  in  town  and  metropolis,  219;  congestion  in 
metropolis,  219;  country  roads  during  town  economy, 
220;  roads  in  the  metropolitan  hinterland,  221;  turn- 
pikes, 221 ;  work  of  highway  engineers  (John  Metcalfe, 
222;  Thomas  Telford,  222;  John  Macadam,  223); 
commercial  result  of  highway  improvement,  223; 
American  highways,  223 ;  French  and  Prussian  high- 
ways, 224;  revived  interest  in  highway  improvement, 
224;  early  canal  projects  around  London,  225;  canals 
in  northern  England,  225;  canals  around  London,  226; 
canals  near  Boston,  226 ;  important  American  canals, 
226;  New  York's  waterways  vs.  New  Orleans',  227; 
metropolitan  rivalry  seen  in  canal  building,  227 ;  object 
of  building  canals,  228;  failure  of  canals,  228;  rail- 
roads in  northern  England,  228;  railroads  affect  all 
parts  of  the  metropolitan  unit,  229 ;  railroads  affect  both 
hinterland  and  extended  trade,  230;  railroads  around 
Paris,  230;  Boston  railroads,  231;  metropolitan  rail- 
road nets,  231 ;  railroad  builders,  232;  steamships,  232; 
steamships  and  inter-metropolitan  trade,  233 ;  Atlantic 
lines  connect  metropolitan  marketing  systems,  233; 
parcel  dispatch,  234;  parcel  service  and  metropolitan 
marketing,  235 ;  post  office  and  metropolitan  market- 
ing, 235;  general  development  of  the  post  office,  236; 
English  post  office,  236;  London  as  postal  center,  237; 
post  office  in  America,  237;  American  post  office  and 
metropolitan  service,  237 ;  telegraph,  238;  telegraph  and 
metropolitan  economy,  238;  metropolitan  specializa- 
tion, 239;  well-developed  metropolitan  organization, 
239;  summary  for  London,  1830-1890,  240;  national 
policy  of  laissez-faire,  241 ;  metropolitanism  and  national 
policy  coincide,  241 ;  third  phase  of  metropolitan  econ- 
omy invites  laissez-faire,  242. 

42.  Fourth  Phase:  Development  of  Financial  Organization: 


TABLE  OF  CONTENTS 

financial  development  begins  early  but  matures  late, 
243 ;  question  of  a  separate  financial  phase,  243 ;  date 
of  the  financial  phase,  London,  1890  f.,  244;  money 
changers  and  banks,  244;  Sir  Thomas  Gresham,  245; 
private  banks  in  London,  246;  bill  of  exchange,  246; 
London  and  Paris  as  bill  markets,  246;  service  of  the 
bill  of  exchange,  247;  stock  exchanges  (in  London, 
Paris,  and  New  York),  248;  stock  exchange  and  credit, 
248;  speculation  in  London,  248;  speculation  in  New 
York,  249;  crises,  250;  Bank  of  England,  250;  finan- 
cial concentration  in  the  metropolis,  251 ;  branch  banks 
link  the  hinterland  with  the  metropolis,  252;  Bank  of 
England  and  the  hinterland,  252;  branch  banks  on  the 
Continent,  253 ;  English  joint-stock  branch  banks,  253 ; 
hinterland  banks  with  metropolitan  connections,  254; 
metropolis  mobilizes  the  capital  of  the  hinterland,  255; 
concentration  of  reserves  in  America,  255;  Federal 
Reserve  system,  256;  business  balances  in  the  metrop- 
olis, 257;  London  fire  insurance  business,  257;  London 
marine  insurance  business,  258;  London  life  insurance 
business,  258 ;  general  effect  of  insurance  business  on  the 
metropolis,  259;  financial  radiation  from  the  metrop- 
olis, 259;  chain  banks  in  America,  259;  combination 
of  money-middlemen,  260;  Wall  Street,  260;  policy  of 
money-middlemen:  laissez-faire,  261;  policy  of  restrict- 
ing money-middlemen,  262 ;  inter-metropolitan  finance, 
262 ;  trade  and  differences  between  metropolitan  cen- 
ters, 263 ;  London  and  Manchester-Liverpool,  264 ; 
joint-stock  branch  banks  of  the  United  Kingdom  cen- 
tering in  London,  265 ;  English  banks  and  extended 
trade,  265 ;  slow  development  cf  financial  independence, 
266 ;  meaning  of  financial  independence,  267 ;  inter- 
metropolitan  financial  relationship,  267 ;  foreign  and 
domestic  metropolitan  exchange  rates,  267 ;  fully  de- 
veloped metropolis  and  its  men  of  business,  268;  fully 
developed  metropolis  visualized,  269. 

43.  Suggestions  for  Further  Study,  269. 

44.  Notes  to  Chapter  V,  273. 


TABLE  OF  CONTENTS 
CHAPTER  VI 

METROPOLITAN  ECONOMY,  CHIEFLY  IN  AMERICA 

45.  Metropolitan  Rivalry:  London  vs.  Amsterdam,  281 ;  Lon- 

don vs.  Paris,  281;  American  rivals,  282;  New  York 
vs.  Montreal,  282;  New  York  vs.  New  Orleans,  284; 
Chicago  vs.  New  York,  284;  Chicago  vs.  St.  Louis, 
285;  Kansas  City  vs.  Twin  Cities,  285;  Pacific  Coast 
cities,  286;  ambitious  new  centers,  286;  rivalry  of  At- 
lantic ports,  286;  Boston  vs.  New  York  in  shipping, 
287;  Boston  vs.  New  York  in  hinterland  trade,  288; 
Boston's  independence  in  manufacturing,  288;  Boston 
vs.  New  York  in  South  and  West,  289 ;  Boston  vs.  New 
York  in  finance,  289 ;  Philadelphia  vs.  New  York,  290 ; 
New  York  and  railroad  rates,  291;  New  York  as  a 
financial  center,  292. 

46.  Metropolitan  Economy  in  America:  eleven  metropolitan 

units  in  America,  292;  metropolitan  units  and  Federal 
Reserve  districts,  293 ;  Baltimore,  293  ;  Cincinnati,  293  ; 
criteria  of  a  fully  developed  metropolis,  294;  Detroit 
and  Pittsburgh,  294;  boundaries  of  metropolitan  areas, 
295 ;  Federal  Reserve  districts,  295 ;  American  metro- 
politan districts  and  their  boundaries,  297 ;  delimiting 
metropolitan  districts,  297 ;  peculiarities  of  metropol- 
itan districts,  298 ;  metropolitan  economy  in  the  South, 
298. 

47.  Development  and  Organization  of  Metropolitan  Econ- 

omy in  the  American  Northwest:  Twin  Cities  of  the 
American  Northwest,  299;  St.  Paul  as  a  fur-trading 
post,  300;  St.  Paul  as  a  town,  300;  Minneapolis  as  a 
manufacturing  town,  300;  wholesaling  in  the  Twin 
Cities,  301 ;  each  of  the  Twin  Cities  has  its  specialties, 
301 ;  phases  of  metropolitan  development,  302 ;  trans- 
portation phase,  302 ;  early  railroads,  303 ;  later  rail- 
roads, 303 ;  storage  in  the  Twin  Cities,  304 ;  financial 
growth  of  the  Twin  Cities,  305;  the  Twin  Cities  as 
a  Federal  Reserve  center,  306;  the  Twin  Cities  a 
full-grown  metropolitan  center,  307 ;  hinterland  of  the 


TABLE  OF  CONTENTS 

Twin  Cities,  307 ;  towns  tributary  to  the  Twin  Cities, 
309;  exceptions  to  metropolitan  concentration,  310; 
exceptions  to  metropolitan  radiation,  311;  exceptions 
not  entirely  exceptional,  311;  hinterland  in  revolt  vs. 
the  Twin  Cities,  311;  such  revolts  not  new,  312;  direct 
or  non-metropolitan  marketing  exists  in  the  Twin  City 
district,  312;  specialization  in  the  Twin  City  dis- 
trict, 313. 

48.  Private  and  Public  Economy:  private  economy,  314;  pub- 

lic economy,  314;  integration  in  production,  315;  econ- 
omies of  metropolitan  trade,  316;  private  economic  units 
within  the  public  metropolitan  organization,  316. 

49.  Economic  and  Political  Organization :  duality  of  economic 

and  political  organization,  316;  parallelism  of  economic 
and  political  development,  316;  casual  relationships, 
317;  national  economy  as  an  organization  of  produc- 
tion, 318;  national  economy  as  a  national  policy  or 
ambition,  319;  national  economy  as  a  national  admin- 
istrative organization,  320;  multiform  human  activities, 
321;  economic  units  as  administrative  units,  321;  will 
the  metropolitan  unit  become  administrative?  322. 

50.  Cultural    Attainments    under    Metropolitan    Economy: 

political  cultural  institutions,  322;  ecclesiastical  cul- 
tural institutions,  323;  town  economic  institutions  of 
culture,  323 ;  the  metropolis  contains  all  three  kinds 
of  institutions,  323 ;  metropolitan  institutions  of  sani- 
tation, 324;  metropolitan  variety  of  foodstuffs,  324; 
care  of  the  sick,  324;  journals,  325;  fashions,  325;  art 
and  science,  325;  education,  326;  culture  of  metro- 
politan tributaries,  327;  culture  builders  of  metropolitan 
economy,  327;  quality  of  metropolitan  culture,  328; 
metropolitan  economy  causes  both  economic  and  cul- 
tural advance,  329. 

51.  Suggestions  for  Further  Study,  329. 

52.  Notes  to  Chapter  VI,  337. 


ILLUSTRATIONS 


PAGE 

Sketch  of  a  Nucleated  Free  Village,  South  Africa. 

Based  on  a  representation  in  H.  A.  Junod's  Life  of  a 

South  African  Tribe  (1913),  I,  282 54 

Plan  of  a  Simplified  Non-Nucleated  Free  Village,  Ger- 
many. 
Based  on  maps  in  A.  Meitzen's  Siedelung  und  Agrar- 

wesen,  Atlas  zu  Band  III  (1895) 57 

Plan   of   a   Simplified    Unfree   Village  or   Manor    (Nu- 
cleated), Southern  England. 

Based  on  the  title-page  map  in  F.  Seebohm's  English  Vil- 
lage Community  ( 1884)    77 

Representation  of  an  Ancient  Egyptian  Symbol  for  a  Vil- 
lage enclosed  by  a  Wall. 

Redrawn   from  Beni  Hasan  Archaeological  Survey   of 
Egypt    (ed.  by  F.  L.   Griffith),   pt.   Ill    (1896), 

plate  V 86 

Map  showing  Towns  and  Dependent  Villages,  Southern 

England. 

Based  on  a  map  in  The  Victoria  History  of  the  Counties 
of  England,  Hampshire  and  The  Isle  of  Wight, 

I   ( 1900) ,  448 108 

Sketch  of  an  Unplanned  Ancient  Town,  Athens 115 

Sketch  of  a   Planned    Medieval  Town,   Salisbury    (i3th 

century). 
Based  on  Speed's  (i7th  century)  drawing  and  Tout's 

reproduction I2O 

Map  showing  Towns  in  the  Hanseatic  League,  about  1400. 
Based  on  map  iyb  in  Putzgers  Historischer  Schul- Atlas 

(ed.  by  A.  Baldamus  and  E.  Schwabe,  1903) ....    130 
Map   showing   Six    Ecclesiastical    Manorial    Groups   and 
their  Town   Centers   in    Medieval   England    (about 
i 3th  century), 


ILLUSTRATIONS 

PAGE 

Taken  from  a  master's  thesis  on  The  Manorial  Group 
by  G.  T.  Droitcour,  University  of  Minnesota, 

1920    159 

Diagram  showing  Population  Boundaries  of  London,  1300, 

I55O,  1750,  1900 182 

Diagram  illustrating  Metropolitan  Rivalry 283 

Map  of  the  Federal  Reserve  Districts,  U.  S.  A. 

Reproduced  by  permission  of  the  Federal  Reserve  Board  296 
Map   showing  the    Metropolitan   District   of   the  Twin 

Cities,  1921. 

From  a  master's  thesis  on  the  Development  of  the 
Twin  Cities  as  a  Metropolitan  Market  by  M.  L. 
Hartsough,  University  of  Minnesota,  1921 308 


EDITOR'S   INTRODUCTION 

The  purpose  of  this  book  is  simple  and  direct.  It 
is  a  synthesis  of  much  special  scholarship  in  the  field 
of  economic  history,  organized  to  give  to  novice  and 
scholar  alike  a  new  and  challenging  survey  of  the  five 
fundamental  stages  of  economic  development  cul- 
minating in  what  to  the  author  is  the  dominant  type 
to-day — metropolitan  economy. 

The  achievement  of  simplicity  and  the  establishing 
of  inclusive  categories  within  the  compass  of  a  brief 
manual  is,  however,  not  a  simple  task.  The  sharper 
the  point  to  which  we  draw  any  generalization  the 
broader  must  be  the  basis  of  the  scholarship  upon 
which  it  rests.  At  every  point,  the  user  of  such  a 
text,  whether  he  be  beginner  or  specialist,  must  be 
furnished  by  enumeration  or  citation  with  access  to 
the  basic  facts.  The  student  must  likewise  be  led  by 
problems  and  suggested  reading  to  test  the  text,  to 
amplify  his  own  knowledge  and  to  see  the  relation  of 
what  he  reads  to  the  economic  system  which  condi- 
tions his  own  life  and  service.  It  seems  to  me  that 
what  is  here  presented  meets  these  varied  and  exact- 
ing tests  supremely  well.  The  student  can  not  find  in 
similar  literature  at  present  any  more  direct  and 
scholarly  survey  which  at  its  conclusion  has  placed  him 
in  so  sound  a  position  to  interpret  the  economic  and 
much  of  the  political  activity  of  the  past  and  of  his 
own  day.  Indeed,  there  is  not  a  business  man  im- 
mersed in  the  direct  operations  of  the  commerce, 
finance,  factory,  and  transportation  who  would  not 


EDITOR'S    INTRODUCTION 

have  a  surer  grasp  of  present-day  economic  processes 
and  organization  as  a  result  of  thoughtfully  reading 
this  stimulating  survey  and  especially  its  last  two  chap- 
ters. Students  of  social  and  political  institutions  will 
find  its  interpretations  of  past  and  present  much  more 
sturdy  and  free  from  political  and  national  bias  than 
the  older  treaties  of  such  Continental  writers  as 
Schmoller  and  his  followers. 

It  should  be  emphasized  that  the  substance  of  this 
work  has  been  tested  in  teaching  for  several  years. 
It  is  here  presented  in  a  form  adapted  to  class  use. 
The  analytical  table  of  contents,  paragraph  headings 
and  topic  headings  at  the  side,  the  diagrams  in  the 
text,  and  class  exercises  and  problems  at  the  end  of 
each  chapter  have  been  worked  out  with  the  teacher 
and  student  in  mind.  The  problems  and  supple- 
mentary reading  have  a  range  of  applicability  much 
wider  than  an  introductory  course.  It  will  be  clear 
that  the  teacher  and  investigator  has,  in  some  of  the 
problems,  an  opportunity  for  extended  investigation 
and  treatment. 

I  feel  free  to  say  that  I  think  Mr.  Gras  has  per- 
formed a  service  of  extreme  value  to  the  increasing 
body  of  students,  citizens,  and  publicists  who  need  an 
historical  introduction  that  serves  to  explain  in  such 
full  measure  from  the  economic  standpoint  the  bases 
of  our  complex  civilization. 

GUY  STANTON  FORD. 


XXll 


AUTHOR'S  PREFACE 

This  book  has  grown  out  of  actual  experience  in 
teaching  economic  history.  It  is  only  part  of  an 
introductory  outline  of  the  subject;  but  because  of 
its  general  treatment  it  really  stands  alone.  Without 
being  confined  to  one  country,  it  nevertheless  stresses 
American  and  English  development. 

Numerous  have  been  the  claims  made  on  behalf 
of  the  economic  interpretation  of  history,  few  the 
efforts  to  write  history  from  that  point  of  view. 
Without  in  any  sense  being  a  theoretical  exposition 
of  history,  the  present  book  has  nevertheless  a  purely 
economic  warp,  with  a  woof  almost  as  varied  as  the 
culture  of  progressive  man. 

It  is  indeed  a  pleasure  to  acknowledge  the  assist- 
ance received  from  various  scholars.  To  research 
assistants  in  economic  history  at  the  University  of 
Minnesota,  I  am  under  heavy  obligations,  to  Miss 
Mildred  L.  Hartsough  and  Miss  Marion  Rubins  for 
several  special  studies  and  to  Miss  Helen  D.  Parker 
for  assistance  in  verifying  manuscript.  From  various 
other  devotees  of  economic  history,  notably  Mrs. 
G.  T.  Droitcour,  Mr.  C.  B.  Kuhlmann,  and  Mr. 
Lawrence  Smith,  I  have  learned  much  that  I  natu- 
rally have  difficulty  in  acknowledging.  Parts  of  the 
manuscript  have  been  read  by  my  colleagues,  Pro- 
fessor L.  L.  Bernard,  Professor  W.  S.  Davis,  and 
Dean  G.  W.  Dowrie.  Substantially  all  of  the 
manuscript  has  been  read  by  Professor  W.  F.  Tamb- 

xxiii 


AUTHOR'S  PREFACE 

lyn,  of  the  Western  University,  who  has  made  many 
valuable  suggestions.  Dean  G.  S.  Ford  has  read 
not  only  all  the  manuscript  but  all  the  proof.  To 
his  criticism  and  knowledge  I  am  deeply  indebted. 
From  first  to  last  I  have  benefited  by  the  critical 
assistance  of  my  wife. 

The  friendly  cooperation  of  the  heads  of  the 
School  of  Business  and  the  History  Department  of 
the  University  of  Minnesota  has  made  this  book 
possible  in  so  far  as  it  made  provision  for  the  elemen- 
tary course  in  economic  history,  a  course  in  which 
the  substance  of  this  book  was  presented. 

N.  S.  B.  GRAS. 
Minneapolis,  15  February,  1922. 


INTRODUCTION 
TO  ECONOMIC  HISTORY 


CHAPTER  I 


COLLECTIONAL  ECONOMY 
I.       ECONOMIC    HISTORY.       From    the    most    primi-    Primitive 

tive  being  to  the  modern  man  is  a  long  journey.  The 
usavage"  was  unclean,  unlearned,  and  uncertain  of  a 
living.  What  he  could  obtain  was  usually  near  at 
hand,  whether  it  be  food  or  shelter,  clothing  or 
adornment.  To-day,  however,  we  enjoy  material 
objects  produced  at  a  great  distance.  The  wool  in  Modem 
our  clothing  may  come  from  Australia ;  the  silk  may 
have  been  produced  in  Japan ;  our  shoes  may  be  made 
from  South  American  hides;  our  bread  from  the 
wheat  of  North  Dakota ;  our  children  may  play  with 
German  toys;  we  may  occupy  a  desk  made  of  West 
African  mahogany  or  a  chair  of  Indian  teak;  our 
coffee  may  still  come  from  Java,  though  more  likely 
from  Brazil.  Indeed  the  whole  world  now  con- 
tributes to  our  needs.  A  complicated  organization 
of  business  makes  this  possible,  one  that  stands  out 
in  marked  contrast  to  the  simple  system  of  earliest 
times.  The  story  of  this  change  is  economic  history. 
The  difference  between  the  economic  life  of  early 
man  and  our  own  is  perhaps  no  greater  than  between 
his  religion  and  ours,  his  government  and  ours,  and 
his  knowledge  and  ours.  The  history  of  religion,  of 
politics,  and  of  science  has  much  to  tell  that  is  of 
value,  but  the  concern  of  this  book  is  with  the  history 
of  economic  progress.  No  detailed  chronological 


4        INTRODUCTION  TO  ECONOMIC  HISTORY 

presentation  of  economic  history  is  contemplated,  but 
rather  a  general  introduction  to  the  subject,  treating 
of  the  stages  of  economic  development. 

Means  of        2.     COLLECTORS.     Like  the  lower  animals,  whom 

hood  tnev  resembled,  the  earliest  men  hunted,  fished,  gath- 
ered berries,  moss,  and  lichens,  seized  such  small 
animals  as  snakes  and  lizards,  ate  the  insects  that 
crawled  beneath  their  feet  or  that  swarmed  on  their 
own  persons,  and  grubbed  in  the  ground  for  wild 
bulbs  and  roots.  Moreover,  they  collected  such  fire- 
wood or  timber  as  was  needed,  and  even  dug  beneath 
the  surface  of  the  earth  for  ocher  (coloring  matter) 
or  for  metal.  One  can  easily  imagine  the  life  led  if 
he  pictures  himself  turned  loose  into  a  forest  or  a 
plain  without  clothes,  tools,  or  weapons.  Of  course, 
the  comparison  is  unfair  to  the  modern  man  who  is 
taught  to  rely  so  much  upon  his  neighbor  to  produce 
for  him  this  or  that  specialty,  clothing  or  food,  lux- 
ury or  necessity;  but  it  does  bring  home  to  us  the 
ingenuity  required  of  early  men  to  supply  all  their 

Collectors  needs  by  appropriating  what  nature  had  provided  in 
the  immediate  district.  The  most  primitive  of  the 
backward  peoples  existing  in  antiquity  or  at  the 
present  time  are  the  collectors  or  appropriators  of 
nature's  gifts.  The  necessity  of  using  what  lay  near 

Effect  of  at  nan(l  gave  rise  to  wide  variations  in  comfort  and 
well-being.  Although  the  gifts  of  nature  differed 
materially  according  to  local  peculiarities,  such  as 
temperature,  moisture,  and  geological  formation, 
nevertheless  we  may  say  that  the  farther  men  lived 
from  the  equator,  the  greater  their  reliance  upon 
animal  food,  till  we  come  to  the  Eskimo,  who  has 
almost  no  other  sustenance  than  game  and  fish. 

Man  and  Man  walked  with  nature  in  the  collectional  stage. 
He  accepted  her  gifts,  followed  her  laws.  Yesterday 


COLLECTIONAL  ECONOMY  5 

he  was  full,  today  empty.  In  sunshine  he  was  merry, 
in  storm  he  suffered  sore  discomfort.  Life  was 
immediate,  with  little  thought  of  the  future,  none 
of  the  past.  The  mind  of  man  in  the  childhood  of 
the  race  was  fixed  on  the  present.  He  was  careless 
in  the  use  of  his  time,  destructive  of  material  goods, 
and  fearful  of  the  dark  and  of  ghosts. 

It  is  the  economic  system  of  this  stage,  collectional 
economy,  that  is  the  chief  concern  here.  So  planless 
was  life  in  this  early  time  that  some  scholars  would 
not  use  the  term  economy,  because  they  hold  that  it  Economy 
connotes  some  thought  for  the  future,  careful  organi- 
zation, in  short,  some  kind  of  system.  But  economy 
means  management,  house  management  originally. 
It  is  evident  that,  although  primitive  man  lacked  the 
higher  economic  qualities,  he  did  manage  his  house- 
hold. His  system  may  have  been  clumsy  but  it  en- 
abled him  to  survive.  Indeed  it  probably  carried 
man  through  a  longer  period  of  existence  than  any 
other  system.  So  we  are  really  justified  in  using  the 
term  "collectional  economy"  to  apply  to  a  stage  when 
our  ancestors  collected  the  gifts  of  the  world  of 
nature,  searched  for  them,  hunted  for  them,  utilized 
them  in  their  own  crude  way. 

3.  DAWN  OF  HISTORY.  Naturally  we  turn  to 
recorded  history  for  the  beginnings  of  human  devel- 
opment. We  know  that  this  history  goes  back  over 
six  thousand  years,  that  it  is  written  in  stone,  bronze, 
iron,  clay,  papyrus,  parchment,  and  paper.  We  know 
that  it  is  on  the  whole  accurate.  But  we  have  not 
proceeded  far  in  our  inquiry  before  we  realize  that 
the  earliest  history  does  not  begin  till  man  has  made 
some  advance  in  civilization,  has  perhaps  climbed 
half  way  up  the  ladder  of  our  present  progress.  It  is 
in  Egyptian  history  that  with  the  help  of  inscriptions 


INTRODUCTION  TO  ECONOMIC  HISTORY 


History 
and 

descrip- 
tion 


we  can  go  farthest  back  into  the  mist  of  antiquity, 
but  there  instead  of  primitive  man  we  find  a  society 
already  well  advanced  in  economic  life,  rich  in  reli- 
gious experience,  and  tending  to  conserve  what  it  has 
rather  than  to  invent  anything  new. 

Long  after  the  dawn  of  history  there  arise  histori- 
ans consciously  recording  the  past,  who  are  of  great 
aid  in  our  quest,  and  those  describing  the  backward 
peoples  of  their  own  day,  writers  such  as  Herodotus, 
Strabo,  and  Tacitus  in  the  ancient  period,  Giraldus 
Cambrensis  and  Marco  Polo  in  the  Middle  Ages,  and 
Ratzel,  Bancroft,  and  many  others  in  our  own  time. 

4.  COLLECTORS  IN  ANTIQUITY.  Herodotus,  writ- 
ing about  430  B.  c.,  described  a  people  in  India  who 
had  no  dwelling-houses,  killed  no  animals,  and  planted 
no  grain.  Their  only  food  was  wild  vegetables  and 
cereals.1  Strabo,  the  Greek  geographer  and  histo- 
rian, described  many  peoples  who  were  in  the  collec- 
tional  stage  in  his  day,  that  is,  about  the  time  of 
Christ.  Near  the  Red  Sea  there  were  root-eaters, 
seed-eaters,  elephant-eaters,  bird-eaters,  turtle-eaters, 
and  locust-eaters.  The  last  named  are  perhaps  the 
most  interesting.  They  were  somewhat  short  and 
dark  and  rarely  lived  beyond  forty  years.  They 
built  smudges  in  ravines,  and  as  the  smoke  ascended, 
it  blinded  the  locusts  as  they  flew  overhead,  and 
caused  them  to  fall  into  the  ravine.  The  locusts 
were  then  collected  and  pounded  together  with  salt, 
made  into  cakes,  and  then  eaten.2 

The  Roman  historian  Tacitus  described  the  Ger- 
Germans  mans  about  98  A.  D.  One  of  the  tribes  had  no 
armor,  no  horses,  and  no  permanent  homes.  They 
were  out-and-out  collectors ;  with  herbs  and  game  for 
their  food,  skins  for  their  clothing,  the  earth  for  their 
bed,  arrows  their  chief  wealth,  they  refused  to  till 


Locust- 
eaters 


COLLECTIONAL  ECONOMY  7 

the  soil  and  were  in  marked  contrast  to  the  more 
advanced  Germans  of  the  west.3 

At  about  the  same  time  collectors  of  various  kinds 
were  said  to  live  in  the  "forests"  of  India:  hunters,  India 
fowlers,  fishermen,  root-diggers,  snake-catchers, 
gleaners,  and  perhaps  flower-,  fruit-,  and  fuel-gath- 
erers.4 Living  in  out-of-the-way  places,  they  are,  of 
course,  to  be  regarded  as  the  exceptional,  not  the 
typical  people  of  India. 

These  historical  records,  we  could  piece  out  from 
the  discoveries  of  archaeologists  who  see  in  the  life  Evidence 
of  the  cave-men  essentially  a  collectional  stage  of  so}ogy 
civilization.  The  archaeologists  have  examined  the 
caves,  found  the  cave-men's  knives,  stone  lamps,  and 
mural  decorations  of  animals  wonderfully  portrayed. 
From  the  folklore  we  could  learn  much,  whether  it 
be  Homer's  description  of  the  isle  of  Cyclops  as  both, 
unplanted  and  unplowed  and  yet  yielding  wheat, 
barley,  and  grapevines,5  or  a  crude  tale  of  a  people 
in  New  Guinea  about  the  time  when  they  hunted  the 
wild  pig  and  lived  inside  the  great  stone  (cave).6 
Valuable  as  is  this  information,  it  is  not  so  reliable 
as  that  obtained  by  examining  those  peoples  who  have 
survived  to  modern  times  in  the  primitive  stage  of 
collectional  economy. 

5.      COLLECTORS     IN     THE     MODERN     PERIOD.      In 

1 68 1  Robert  Knox,  after  a  captivity  of  twenty  years 

on  the  island  of  Ceylon,  described  the  wilder  natives 

of  the  island  as  out-and-out  collectors.     These  Ved- 

dahs,   for  such  is  their  name,   constituted  the   most  Veddahs 

primitive  group  on  the  island.     They  had  not  only 

no  towns  but  no  houses,  living  beside  some  stream 

or  pool  under  a  tree  with  some  boughs  laid  about 

them.     They  tilled  no  ground,  but  lived  on  the  flesh 

of   game    and    the    honey    of   wild   bees.7     To-day, 


8        INTRODUCTION  TO  ECONOMIC  HISTORY 

though  most  of  these  people  have  followed  the  gen- 
eral human  trend  and  moved  upward  in  the  scale  of 
civilization,  a  few  of  them  still  support  themselves  as 
their  ancestors  did:  the  men  hunt  animals  and  gather 
honey,  and  the  women  dig  yams.  They  have  two 
homes,  one  in  the  highlands,  a  rock  shelter  or  cave 
for  the  wet  season,  and  one  in  the  lowlands,  a  hut  of 
flimsy  structure.  In  the  rock  shelters  there  are  no 
partitions  but  rather  floor  areas  for  the  various 
families,  with  one  section  used  as  an  arsenal  for  the 
whole  group.  They  sleep  on  a  deerskin  by  choice 
but  often  on  a  rock  by  necessity.  They  make  it  a 
point  to  avoid  the  damp  ground.  When  asked 
whether  they  ever  went  out  at  night,  they  roared  with 
laughter  at  the  idea.  It  is  too  dark  to  see;  and,  if 
bears  lurk  about,  why  should  they  go  out  into  the 
jungle  at  night?  Such  is  their  sense  of  humor  that 
they  laughed  again,  and  it  was  ten  minutes  before 
one  of  them  regained  composure.8 

In  another  tropical  island,  Madagascar,  there  is 

Mada-  a  people  that  lives  by  hunting,  fishing,  and  gathering 
wild  fruits  and  vegetables.  Efforts  have  been  made 
by  missionaries  to  induce  this  people  to  raise  cattle. 
This  occupation  would  involve  but  little  labor  and 
would  make  their  source  of  food  supply  more  cer- 
tain, but  the  natives  were  unwilling  to  make  the 
experiment.9 

So  widespread  are  the  peoples  of  this  the  most 
primitive  stage  known  to  us,  that  we  can  find  examples 
on  every  continent,  in  such  widely  separated  islands 
as  Tierra  del  Fuego  and  Madagascar,  and  in  every 
zone,  from  the  Bushmen  of  South  Africa  to  the  Es- 
kimo of  the  Arctic  circle.  Of  late  years,  because  of 
the  voyages  undertaken  for  the  discovery  of  the  north 

Eskimos     pole,  we  have  been  most  interested  in  the  Eskimos, 


COLLECTIONAL  ECONOMY  9 

who  depend  solely  upon  hunting,  fishing,  and  gather- 
ing berries,  roots,  and  moss.  They  get  their  main 
subsistence  from  the  seal  and  the  reindeer,  which  pro- 
vide them  not  only  with  food  but  oil  for  lamps  and 
skins  for  clothing,  canoes,  nets,  and  lassoes.  They 
prefer  cooked  food  but  do  not  object  to  it  raw.  Co- 
agulated blood,  mashed  cranberries  with  rancid  oil. 
and  live  maggots  are  delicacies  to  them.10 

When  Europeans  discovered  and  explored  North 
America,  they  found  many  natives  in  the  stage  of 
collectional  economy.  In  1610  some  tribes  from  New-  Indians 
f  oundland  even  to  New  England  were  hunting  nomads 
without  any  garden  culture  or  agriculture  (and  of 
course  no  pasturing).  They  never  stopped  longer 
than  five  or  six  weeks  in  one  place,  shifting  about 
according  to  the  condition  of  hunting  or  fishing.11 

The  Indians  of  British  Columbia  and  the  district 
round  about  remained  collectors  up  to  recent  times 
and  many  probably  up  to  the  present.     One  people  Indians 
living  on   the   Charlotte   Islands   eats   fish   and  fish  Columbia 
spawn,  clams,  cockles,   and  shellfish,  wild  parsnips, 
berries,  bulbs,  and  the  inner  tegument  of  pine  and 
hemlock  dried  in  cakes  and  eaten  in  fish  oil.12 

It  is  in  California,  however,  the  mecca  of  so  many 
whites  in  our  day,  that  the  most  primitive  natives 
perhaps  in  all  North  America  were  found.  Some  of 
them  were  called  the  Diggers,  a  term  that  sums  up 
their  means  of  livelihood.  Generally  speaking,  the 
women  dug  roots,  collected  berries,  and  preserved 
food,  while  the  men  hunted  such  small  animals  as 
could  easily  be  caught.  In  southern  California  the  In- 
dians ate  coyotes,  skunks,  wildcats,  rats,  mice,  crows, 
hawks,  owls,  lizards,  frogs,  snakes,  grasshoppers, 
stranded  whales,  and  fish.  The  lowest  of  them  all, 
the  Shoshones,  lay  in  a  stupor  during  the  winter,  with 


io      INTRODUCTION  TO  ECONOMIC  HISTORY 

no  clothes,  with  few  weapons  or  tools,  and  scarcely 
any  cooked  food.13     In  their  filth  and  helplessness 
they  resembled  the  swine  of  the  proverbial  sty. 
Causes  It  is  perhaps  inevitable  that  at  this  point  we  should 

wardness  reflect  upon  the  explanation  of  the  backwardness  of 
peoples  still  living  in  this  early  stage,  while  others 
have  made  such  far-reaching  advances.  It  seems 
obvious  that  the  Eskimos  should  remain  in  the  col- 
lectional  stage  because  the  higher  economic  pursuits 
are  so  difficult  in  a  climate  so  rigorous,  but  the  white 
man  has  taught  them  here  and  there  in  favorable 
locations  to  follow  the  example  of  some  of  the  Lapps 
in  herding  the  reindeer.  The  humid  hot  climates  of 
the  Amazon  valley  and  of  southern  Madagascar, 
where  every  task  requires  great  effort,  would  be  an 
obvious  damper  to  progress,  but  how  can  we  explain 
the  failure  of  the  Calif ornian  Indians  to  advance? 
Theirs  was  a  fine  climate  and  to  the  east  and  south  of 
them  there  were  more  advanced  peoples.  Generally 
speaking,  men  stagnate  where  there  is  isolation.  It 
is  a  notable  fact  that  in  the  remote  islands  of  the 
world  we  find  a  great  number  of  instances  of  back- 
ward peoples,  in  Tierra  del  Fuego,  Madagascar, 
Ceylon,  some  of  the  Oceanic  Islands,  and  Tasmania. 
Australia,  itself  an  island,  shut  off  from  contact  except 
with  a  few  neighboring  peoples,  affords  an  illustra- 
tion of  one  of  the  most  primitive  groups  known.14  In 
short,  we  can  generally  explain  retarded  development 
by  isolation  or  an  unfavorable  climate,  but  California 
suffered  from  neither  of  these. 

6.       SURVIVAL  OF  COLLECTIONAL  PURSUITS.     Long 

after  collectional  economy  had  passed  away — that 
is,  after  collectional  pursuits  had  ceased  to  be  the 
main  means  of  livelihood,  men  still  supplemented 
their  new  methods  by  the  old.  This  is  true  of  the 


COLLECTIONAL  ECONOMY  n 

ancient,  medieval,  and  even  modern  periods  of  his- 
tory. 

An  ever-to-be-remembered  character  in  Norse  his- 
tory migrated  from  Norway  to  Iceland.  Indeed,  he  Skalla- 
was  one  of  the  earliest  recorded  settlers  of  the  island,  f  n™'  g?g 
Like  his  fellow  immigrants  (probably),  he  lived  in  a 
stage  of  production  higher  than  collectional  economy, 
but  he  was  compelled  to  supplement  pasturing  and 
tillage  by  fishing,  seal  hunting,  egg  gathering,  col- 
lecting driftwood,  and  shooting  whales.15  It  is  inter- 
esting to  recall  that  both  egg  gathering  and  the  gath- 
ering of  feathers  from  the  nests  of  the  eider  duck 
are  important  in  Iceland  up  to  the  present  time.  On 
another  island  nearer  to  the  coast  of  Norway,  we 
are  told  similar  dependence  was  put  on  these  means 
of  getting  supplies.16  Of  course,  this  brings  the  whole 
subject  quite  near  to  us,  for  the  Norse  are  close  kins- 
men of  many  people  in  Europe  and  America  at  the 
present  day. 

In  medieval  England  the  kings  set  aside  a  part 
of  the  country  as  forest  reserve.  It  was  not  actually  English 
all  forest,  but  under  forest  law.  There  the  king  went 
to  hunt  and  there  his  officials  administered  a  law  that 
was  severe  indeed,  the  enforcement  of  which  brought 
him  many  curses  from  the  people.  But  what  con- 
cerned the  sovereign  more,  if  that  was  possible,  was 
the  fact  that  it  provided  him  with  a  considerable 
revenue  in  fines  and  fees  paid  for  permission  to  hunt 
and  to  collect  forest  products,  such  as  honey  and 
fallen  wood.  It  has  been  said  that  this  forest,  quite  Early 
a  large  part  of  which  was  given  over  to  collectional 
pursuits,  comprised  perhaps  one-third  of  all  England. 

We  need  go  no  farther,  for  all  know  well  enough  Collec- 
the  part  that  collection,  or  mere  appropriation,  plays  p°"sau;ts 
to-day,  especially  in  fishing,  mining,  quarrying,  lum-  of  to-day 


12      INTRODUCTION  TO  ECONOMIC  HISTORY 


Food 
elements 


Balanced 
diet 


Herbi- 
vorous 
man 


bering,  and  oil  pumping,  to  say  nothing  of  the  humbler 
activities  of  nut  gathering  and  berry  picking.  A  re- 
alization of  such  survivals  adds  interest  to  the  obser- 
vation of  economic  activities.  Some  are  primeval, 
some  just  old,  others  very  late  discoveries. 

7.  THE  FOOD  OF  COLLECTORS.  To  man  in  all  ages 
the  getting  of  food  is  a  prime  consideration,  but  to 
early  man  it  constituted  a  large  part  of  his  existence. 
Accordingly,  we  may  weigh  early  civilization  to  a 
greater  extent  than  our  present  civilization  by  its 
success  or  failure  in  the  matter  of  food. 

There  are  at  least  five  different  food  elements  used 
by  man.  Protein  is  the  indispensable  tissue  builder, 
obtained  from  both  plants  and  flesh.  Fats  and  carbo- 
hydrates (starch,  sugar,  and  honey)  are  both  sup- 
plementary foods;  whereas  the  fats  are  found  in  both 
flesh  and  vegetables,  the  carbohydrates  are  almost 
wholly  confined  to  plants.  Minerals,  such  as  com- 
mon salt,  phosphates,  and  sulphates,  are  necessary 
for  the  formation  and  upkeep  of  bones  and  protective 
tissue.  And  vitamines,  the  nature  of  which  is  as  yet 
unknown,  are  indispensable  for  good  health,  for  pre- 
venting debilitating  diseases  and  organic  weakness 
which  leave  the  body  a  prey  to  the  first  epidemic. 

To-day,  of  course,  our  dietetic  system  is  based  upon 
the  use  of  both  plant  and  animal  food  combined  in 
many  ways.  The  omnivorous  collector,  who  ate  both 
plants  and  animals,  would  also  have  every  oppor- 
tunity of  obtaining  a  balanced  diet,  provided  his 
selection  was  sufficiently  wide.  The  very  fact  that 
in  this  stage  man  ate  indiscriminatingly  the  things 
nearest  to  hand  and  most  easily  obtained,  tended  to 
induce  variety  of  selection. 

The  herbivorous  man  is  rather  hard  to  find.  The 
seed  eaters,  root  eaters,  and  lotus  eaters  of  Strabo's 


COLLECTIONAL  ECONOMY  13 

time  may  be  examples.  To  the  Australian  aborigines, 
plants  are  probably  more  important  than  animals, 
eminently  so  in  bad  hunting  seasons.  It  is  probably 
true  that  the  purely  herbivorous  man  can  obtain  all 
of  the  five  food  elements  mentioned  above,  provided 
his  selection  is  widely  made.  He  must  see  to  it,  and 
his  appetite  will  be  his  guide,  that  he  is  not  deficient 
in  proteins,  which  he  may  obtain  from  wild  cereals 
and  from  nuts.  Vitamines  are  within  easy  reach  in 
the  roots,  leaves,  and  seeds  of  numerous  plants,  as 
well  as  fruits  like  oranges  and  grapes.17 

It  is  the  purely  carnivorous  man,  however,  that  we 
think  must  have  difficulty  in  securing  a  well-rounded  Carni- 
diet.  We  know  that  the  Eskimo  collects  reindeer  ^an"8 
moss  whenever  he  can,  and  that  the  Indian  hunter 
makes  a  great  point  of  storing  plants  to  supplement 
his  flesh  diet.  These  practices  are  not  really  neces- 
sary, for  a  purely  meat  diet  may  be  in  itself  well 
balanced.  Such  a  meat  diet,  however,  should  include 
not  only  the  muscle  but  also  the  blood,  the  organs  of 
the  body,  and  the  bones.  The  Melanesians  of  New 
Guinea  regard  the  tongue,  hands  and  feet,  mammary 
glands,  the  brain,  intestines,  solid  viscera,  and  sexual 
organs  as  the  most  delicate  parts  of  their  human 
victims.18  When  the  collector  roasts  whole,  a  kan- 
garoo, a  monkey,  or  a  bird,  he  provides  himself  with 
a  gravy  richer  in  food  elements  than  the  muscle.  The 
liver  is  especially  valuable  as  a  container  of  vitamines. 
The  only  food  element  not  provided  by  a  flesh  diet 
is  the  carbohydrate,  which  the  body  can  itself  provide 
from  proteins. 

Scientists  of  late  years  have  given  not  a  little  atten-  Modem 
tion  to  the  food  of  primitive  man  and  have  learned 
much  from  his  habits.     The  physique,  robust  health,  men 
and  good  teeth  of  the  "savage,"  make  us  think  that 


14      INTRODUCTION  TO  ECONOMIC  HISTORY 


Bad  side 
of   primi- 
tiveman's 
diet 


Uneven 
supplies 


Storage 
for  con- 
sumption 


there  is  something  in  diet  that  the  civilized  man  of 
to-day  fails  to  get.  Sometimes  when  we  see  people 
buying  liver,  kidneys,  and  other  parts  of  the  slain 
animal,  we  shudder  at  the  thought  of  eating  such,  but 
it  is  we,  and  not  the  consumers  of  such  organs,  that 
suffer. 

There  are,  of  course,  other  aspects  to  the  story  of 
the  collector's  diet.  Putrid  meat  was  eaten,  appar- 
ently without  offending  the  consumer's  finer  senses. 
When  a  negro  of  the  French  Congo,  himself  in  even 
a  higher  than  the  collectional  stage,  was  asked  why  he 
ate  carrion,  he  said,  "I  don't  eat  the  smell."19  But 
probably  very  often  this  meat  must  have  bordered 
on  the  poisonous,  and  only  by  vigorous  cooking  could 
the  toxic  effect  be  offset.  It  has  been  often  noted  by 
travelers  that  aged  people  living  in  the  stage  of  col- 
lectional economy  had  worn  down  their  teeth  to  the 
very  gums.  This  might  be  by  eating  tough  meat  or 
fibrous  roots,  or  as  in  the  case  of  one  Indian  tribe 
in  British  Columbia,  by  eating  dried  fish  over  which 
sand  had  been  blown  before  it  was  stored  for  the 
winter.20 

More  dangerous  than  decayed  food  or  the  wear- 
ing away  of  teeth,  was  the  uneven  supply  of  food- 
stuffs. In  the  tropics  and  subtropics  this  was  not  so 
serious,  but  in  the  temperate  and  frigid  zones  it  might 
happen  at  any  time  that  hunting  or  fishing  would  fail 
and  the  sole  reliance  would  be  upon  plant  food  which 
might  not  exist  in  sufficient  quantities.  To  remedy  the 
shortness  of  supplies  in  the  winter,  the  collector  pre- 
served and  stored  both  flesh  and  plants,  fish  and  ber- 
ries. Indeed,  this  provision  for  the  future  may  be 
regarded  as  one  of  his  highest  attainments.  And 
yet,  to  a  great  extent,  it  is  instinctive.  We  at  once 
compare  it  with  the  practice  of  the  bees,  ants,  and 


COLLECTIONAL  ECONOMY  15 

squirrels.  When  we  come  to  a  later  stage,  we  shall 
see  that  goods  were  stored  not  merely  for  subsistence 
but  for  further  production,  as  when  the  cultivator 
stores  grain  for  seed.  When  this  point  is  reached  we 
can  feel  sure  that  storage  is  no  longer  instinctive  but 
rational,  that  it  has  become  a  part  of  the  reasoned 
process  of  careful  living. 

8.       GENERAL  ATTAINMENTS  OF  THE  COLLECTORS. 

We  have  already  noted  several  of  the  common  char- 
acteristics of  peoples  in  the  stage  of  collectional  econ- 
omy. They  were,  of  course,  all  collectors,  but  now  Work  of 
we  must  distinguish  between  men  and  women.  There  ^Q^!^ 
was  a  real  division  of  employments  between  the  two. 
Man  hunted  and  fished,  while  woman  dug  roots  and 
picked  berries.21  Man  fought,  while  woman  cared 
for  the  young.  Man  made  metal  and  leather  com- 
modities, while  woman  manufactured  textiles.  Man 
procured  the  game,  while  woman  cooked  or  preserved 
it.  Man  ran  the  risks  of  an  exciting  life,  while  woman 
bore  the  burdens  of  a  more  humdrum  existence.  It  is 
obvious  that  such  a  division  of  occupations  was  based 
upon  the  natural  abilities  of  the  two  sexes.  Then, 
as  now,  the  two  chief  concerns  of  mankind  were  the 
preservation  of  the  individual  and  the  perpetuation 
of  the  race.  We  can  identify  man  more  particularly 
with  the  former  and  woman  more  particularly  with 
the  latter.  But  specialization  is  found  within  the  sex, 
one  man  making  arrows  and  another  concocting  med- 
icines.22 Sometimes  a  whole  tribe  would  specialize 
in  the  collecting  of  one  commodity  while  a  neighbor- 
ing people  would  specialize  in  another,  so  that  ex- 
change would  naturally  spring  up  whereby  the  fish 
and  oil  of  one  tribe  would  be  bartered  for  the  skins, 
roots,  and  game  of  another.23 

Totemism  is  the  general,  if  not  universal,  religion   Religion 


16      INTRODUCTION  TO  ECONOMIC  HISTORY 

of  peoples  in  the  collectional  stage.  It  springs  from 
the  respect  paid  to  wild  animals  and  plants,  the  main 
interest  of  their  lives,  out  of  which  arises  a  whole 
series  of  peculiar  observances.2*  A  man  whose  totem 
is  a  hawk  may  ordinarily  not  eat  the  hawk,  perhaps 
not  even  touch  it.  It  is  taboo  or  forbidden  to  him. 
This  was  probably  not  the  whole  of  the  collector's 
religion,  but  was  a  large  part  of  it.  Remnants  of 
it  are  found  surviving  long  after  a  people  has  passed 
on  to  a  higher  economic  stage — so  conservative  is 
mankind  in  religious  matters.  A  good  example  of 
this  is  seen  in  the  history  of  the  Hebrew  people,  who, 
it  is  claimed,  abhorred  pork  not  because  of  fear  of 
disease  but  because  the  pig  (as  well  as  other  animals) 
was  in  some  way  connected  with  their  religion  in  pre- 
historic days.  The  worship  of  the  golden  calf,  the 
brazen  serpent,  the  fish  god,  and  the  fly  god,  are 
thought  to  be  similar  cases.25 

A  few  attainments  and  habits  of  collectors  that 

Art  cannot  be  considered  at  length  are  at  least  worthy  of 

notice.  Closely  connected  with  early  religion  was  the 
dance,  the  significance  and  interpretation  of  which  are 
difficult.  Although  the  dance  seems  crude  to  us,  it  was 
probably  the  chief  expression  of  the  collectors'  artis- 
tic sense,  perhaps  not  now  so  much  appreciated,  how- 
ever, as  the  occasional  survivals  of  their  pictorial 
art  found  in  caves.  Characteristics  or  customs  of  a 

Customs  non-artistic  nature  common  to  the  peoples  living  in 
collectional  economy  include  the  keeping  of  dogs, 
love  of  gambling,  fear  of  the  elements,  the  disregard 
of  human  life,  approval  of  theft  from  a  rival  group 
or  clan,  feuds,  childish  stories  or  legends,  and  certain 
diseases  such  as  sore  eyes — caused  partly  by  living 
in  smoky  caves,  tents,  or  huts. 

In  the  winter,  or  whenever  the  hunting  was  not 


COLLECTION AL  ECONOMY  17 

good,  the  people  in  this  stage  lived  in  fairly  large  village 
village  groups,  the  basis  of  the  unity  of  which  was  groups 
kinship.  But  in  hunting  and  fishing  seasons  the  vil- 
lage broke  up  into  small  groups  organized  for  the 
collection  of  food  and  other  necessities.  The  Ved- 
dahs  would  go  for  a  week  or  a  month  with  their 
family  to  gather  honey;26  some  of  the  Indians  of  the 
Columbia  River  district  seem  to  have  spent  all  but 
three  months  of  the  year  wandering  about  in  search 
of  food.27  Sometimes  the  location  of  the  winter  vil- 
lage would  be  changed,  but  only  for  a  very  good 
reason.  For  example,  a  few  Indians  of  the  extreme 
northwestern  part  of  America,  such  as  the  Tinnehs, 
wandered  over  unusually  wide  areas,  but  this  was 
because  the  territory  was  not  rich  in  game. 

It  seems  to  be  true  that  all  collectional  peoples 
required  a  relatively  large  area  for  their  support.  Area 
Probably  in  the  United  States  and  Canada  there  ££uirr0e_d 
never  were  more  than  five  million  Indians,  and  some  auction 
of  the  Indians  had  already  developed  into  a  higher 
cultural  stage.  In  the  two  countries  to-day  there  are 
probably  not  more  than  115,000,000  people.  Con- 
sidering only  quantity  and  neglecting  quality,  we  can 
say  that  we  are  to-day  more  than  twenty  times  as 
efficient  as  the  Indians.  The  reason  for  the  scanty 
Indian  population  was  partly  a  wasteful  system  of 
production,  one  that  failed  to  utilize  fully  all  the 
natural  resources  such  as  are  now  used  in  pasturing, 
field  cultivation,  and  mining,  and  also  partly  the 
unhygienic  habits  of  life  and  the  irrational  tribal 
wars.  Improvements  along  all  of  these  lines  are,  of 
course,  still  to  be  made  and  obviously  much  remains 
to  be  done. 

It  would  be  a  perversion  of  the  facts  to  maintain 
that  all  peoples  in  the  collectional  stage  had  a  perfectly 


i8      INTRODUCTION  TO  ECONOMIC  HISTORY 


Varia- 
tion in 
culture 


The  stone 
and  other 
ages 


Lower 
collectors 


Higher 
collectors 


uniform  culture.  In  many  matters  there  was  wide 
variation,  in  the  shape  of  the  house,  in  the  material28 
of  its  construction,  in  the  manner  of  burying  the  dead, 
in  physical  appearance,  in  the  number  of  wives,  in 
the  part  played  by  woman  in  the  dance,  and  in  many 
other  respects.  Such  variations,  due  to  local  con- 
ditions, are  of  little  economic  significance. 

Archaeologists  are  accustomed  to  divide  the  pre- 
historic period  into  stages  typified  by  the  use  of  dif- 
ferent materials  for  tools — the  rough-stone  age,  the 
smooth-stone  age,  the  age  of  copper  and  stone,  the 
age  of  bronze,  and  the  age  of  iron.  In  all  probabil- 
ity, the  first  two  of  these  might  be  taken  to  mark  off 
phases  of  the  development  of  collectional  economy. 
As  to  whether  the  iron  age  generally  fell  within  the 
collectional  period,  it  is  difficult  to  say.  Africa  seems 
to  have  had  no  bronze  period  at  all.  Indeed,  too 
much  depends  upon  the  local  supply  of  these  different 
articles  to  justify  one  in  generalizing  about  them. 
The  simple  distinction  between  lower  and  higher  col- 
lectors is  of  much  more  general  significance. 

The  lower  collectors  such  as  the  wild  Veddahs, 
Australian  aborigines,  and  some  of  the  Californian 
Indians,29  were  the  more  primitive.  They  hunted  in 
smaller  groups,  used  cruder  weapons,  killed  smaller 
game,  and  were  less  skillful  in  battle.  Instead  of  the 
buffalo,  the  reindeer,  or  the  bear,  they  killed  the 
skunk,  the  crow,  the  lizard,  the  snake,  and  the  insect. 
Accordingly,  they  did  not  possess  as  good  food  or 
as  good  skins  for  clothing  or  tents  as  did  the  higher 
collectors.  Such  a  distribution,  though  very  real  in 
its  cultural  significance,  and  very  important  in  its 
bearing  upon  the  health,  strength,  and  happiness  of 
the  people,  nevertheless  is  a  matter  of  degree  rather 
than  of  kind.  Although  both  the  higher  and  the  lower 


COLLECTIONAL  ECONOMY  19 

were  collectors  of  animals  and  vegetables,  only  the 
higher  would  develop  into  the  next  stage  of  civiliza- 
tion, the  cultural  nomadic.  This  would  take  place 
only  where  conditions  were  favorable :  chiefly  in  the 
tropical,  subtropical,  and  the  temperate  zones.  The 
collectors  of  the  far  north,  the  Eskimos,  and  some 
of  the  Indians  and  Lapps,  had  but  little  opportunity 
of  reaching  a  higher  stage  because  of  the  cold  climate 
and  rough  lands  in  which  they  lived. 

9.     SUGGESTIONS  FOR  FURTHER  STUDY 

1.  For  a  brief  account  of  a  people  in  the  collectional  stage, 
see  the  article  on  the  Eskimo  in  the  Encyclopedia  Britannica. 

2.  For  an  extensive  survey  of  peoples  in  the  collectional 
stage,  see  the  list  of  various  tribes,  nations,  and  races  entitled 
"Anthropology    and    Ethnology,    Races    and    Tribes,"    in    the 
Encyclopedia  Britannica    (nth  ed.),   Index  volume,  p.  883. 
For  example:    Bambute,  Batwa,  Botocudos,   Bushmen,  Vaal- 
pens. 

3.  Read  Ratzel,  History   of  Mankind,  3   vols.    (1885-88, 
translation  1898).     See  the  section  on  the  Bushmen  in  vol.  II, 
pp.  262-279.    This  work  is  valuable  if  used  critically. 

4.  Read  the  accounts  of  the  Indians  of  the  Pacific  North- 
west to  be  found  in  the  History  of  the  Expedition  of  Captains 
Lewis  and   Clark,   1804-5-6    (ed.  by  J.  K.   Hosmer,  2  vols., 
1902).     Note  specially  vol.  II,  chaps.  IV,  V,  or  VI.     For  an 
interesting  account  of  American  hunters,  see  Zane  Grey's  book, 
The  Last  of  the  Plainsmen   (1908,  1911). 

5.  What  is  the  advantage  in  calling  the  stage  described  in 
this  chapter  the  "collectional"  rather  than  the  "hunting  and 
fishing"  stage? 

6.  Compare  the  activities  and  potentialities  of  lower  and 
higher  collectors. 

7.  Illustrate  this  statement:    some  white  men  in  America 
to-day  get  their  living  largely  by  collectional  pursuits,  some  just 
supplement  their  living  in  this  way,  while  others  collect  simply 
by  way  of  diversion. 


20        INTRODUCTION  TO  ECONOMIC  HISTORY 

8.  Give   examples   of    (a)    collectional    pursuits   that   are 
diminishing  to-day,  and  (b)  others  that  might  be  relied  upon  to 
a  greater  extent  in  the  future. 

9.  In  what  different  senses  is  the  word  "economy"  used? 

10.  Was  there  a  labor  problem  in  the  stage  of  collectional 
economy  ? 

11.  Do  you  associate  stagnation  with  a  lack  of  specializa- 
tion of  labor  and  employments  ? 

12.  Study  causes  for  the  stagnation  of  peoples,  by  examin- 
ing the  accessibility,  fertility,  and  climate  of  their  district. 

13.  Which  was  the  more  fundamental  factor  in  economic 
life,  environment  or  mental  endowment? 

14.  Was  the  relatively  low  culture  or  civilization  reached 
in  this  stage  due  to  the  economic  system? 

15.  Comment:  in  this  stage  equality  ruled  and  also  poverty. 
Why? 

1 6.  What  is  the  evidence  that  these  primitive  men  were 
really  backward  and  not  degenerated  from  a  higher  civiliza- 
tion? 

17.  Were  the  morals  of  early  man  much  different  from 
ours? 

1 8.  Was  his  art  much  inferior  to  ours  in  essentials?     Con- 
sider the  cave-wall  drawings. 

19.  Make  a  list  of  all  the  cultural  attainments  of  people 
in  this  stage  so  as  to  be  able  to  compare  them  with  the  contri- 
butions in  subsequent  stages.     Would  you  add  the  use  of  fire, 
weapons,  and  tools,  to  those  mentioned  in  the  text? 

20.  Does  the  law  of  compensation  hold  good?     Did  the 
collectors  have  enough  advantages  to  compensate  them  for  their 
disadvantages,  when  compared  with  modern  men? 

21.  Compare  men  in  the  collectional  stage  with  the  child  as 
to  saving,  capacity  for  continuous  effort,  perspective,  and  joyous 
living. 

22.  Are  we  justified  in  dealing  with  prehistoric  conditions 
in  a  treatise  on  economic  history  f 

For  further  study  of  the  whole  subject,  see  the  books  and 
articles  referred  to  in  the  notes  immediately  following. 


COLLECTIONAL  ECONOMY  21 

10.    NOTES  TO  CHAPTER  I. 

1.  Herodotus,    History    (ed.    Rawlinson,    1910),    vol.    I, 

P-  259. 

2.  Strabo,  Geography   (Bohn),  vol.  Ill,  pp.  197-198.     It 
is,  of  course,  impossible  to  say  how  far  these  various  peoples 
confined  themselves  to  the  foods  in  question. 

3.  Tacitus,    Germania     (Loeb's    Classical    Library),    pp. 

331-333. 

4.  The  Laws  of  Manu  (trans,  by  G.  Buhler,  in  The  Sacred 
Books  of  The  East,  1886),  p.  300. 

5.  Homer,  Odyssey  (trans,  by  G.  H.  Palmer),  p.  132. 

6.  C.  G.  and  B.  Z.  Seligmann,  The  Melancsians  of  British 
New  Guinea   (1910),  p.  388. 

7.  Robert    Knox    quoted    in    Seligmann.      The    Veddahs 
(1911),  p.  6. 

8.  C.   G.   and    B.   Z.   Seligmann,    The   Feddahs    (1911), 
pp.  43-44,  81,  87,  329. 

9.  Information  by  a  native  student,  Mr.  Eugene  Rateaver, 
active  in  missionary  work  in  southern  Madagascar. 

10.  H.  H.  Bancroft,  Works,  The  Native  Races   (1886), 
vol.  I,  pp.  54-58. 

11.  Marc  Lescarbot  in  Jesuit  Relations,  vol.  I,  p.  83.    Con- 
trast, however,  the  Indians  near  Plymouth,  Mass. 

12.  H.  H.  Bancroft,  Works,  The  Native  Races   (1886), 
vol.  I,  pp.  162-163. 

13.  Ibid.,  vol.  I,  pp.  326,  405,  441. 

14.  J.  G.  Frazer,  Totemism  and  Exogamy  (1910),  vol.  I. 
pp.  92-93- 

The  aborigines  of  central  Australia  wore  no  clothes,  even 
though  the  nights  were  cold.  They  huddled  together,  getting 
warmth  one  from  the  other's  body,  sometimes  in  their  slumbers 
rolling  onto  the  embers  of  the  burning  fire.  Moreover,  they 
had  no  knowledge  that  the  union  of  the  sexes  caused  the  pro- 
creation of  children,  thinking  that  women  were  impregnated 
by  the  spirits  of  dead  men  that  temporarily  dwelt  in  the  earth. 

It  should  be  noted  that  the  Maoris  of  New  Zealand,  being 
themselves  newcomers,  were  not  so  backward  as  most  islanders 
that  are  isolated  from  external  influences. 


22         INTRODUCTION  TO  ECONOMIC  HISTORY 

15.  The  Story  of  Egil  Skallagrimsson  (ed.  by  W.  C.  Green, 

1893),  P-  51- 

1 6.  Ibid.,  p.  17. 

17.  J.  F.  McClendon,  "Nutrition  and  Public  Health  with 
Special  Reference  to  Vitamines,"  in  American  Journal  of  the 
Medical  Sciences,  April,  1920,  pp.  483-484. 

1 8.  C.  G.  and  B.  Z.  Seligmann,  The  Melanesians  of  British 
New  Guinea   (1910),  p.  552. 

19.  A.  L.  Cureau,  Savage  Man  in  Central  Africa  (1915), 
pp.  22O-22 1. 

20.  H.  H.  Bancroft,  Works,  The  Native  Races   (1886), 
vol.  I,  p.  163. 

21.  Ibid.,  vol.  I,  page  266;  J.  G.  Frazer,  Spirit  of  the  Corn 
and  of  the  Wild,  vol.   I,  pp.   124-130;  B.   Malinowski,   The 
Family  Among  the  Australian  Aborigines  (1913),  p.  281. 

22.  H.  H.  Bancroft,  Works,   The  Native  Races   (1886), 
vol.  I,  p.  342. 

23.  Ibid.,  vol.  I,  p.  239. 

24.  J.  G.  Frazer,  The  Spirit  of  the  Corn  and  of  the  Wild, 
vol.  I,  p.  35;  and  Totemism  and  Exogamy    (1910),  vol.  IV, 
p.  18. 

25.  G.  Mallery,  "Israelite  and  Indian,"  in  Proceedings  of 
the  American  Association  for  the  Advancement  of  Science,  vol. 
XXXVIII,  pp.  297,  323. 

26.  C.  G.  and   B.  Z.   Seligmann,    The   Veddahs    (1911), 
p.  82. 

27.  H.  H.  Bancroft,  Works,   The  Native  Races   (1886), 
vol.  I,  p.  267  n. 

28.  N.  W.  Thomas,  Natives  of  Australia  (1906),  pp.  109, 
117. 

29.  For  a  list  of  lower  and  higher  "hunters,"  see  L.  T. 
Hobhouse,   Wheeler,    and    Ginsberg.      The  Material   Culture 
and  Social  Institutions   of   the  Simpler  Peoples    (1915),    pp. 
30-35- 


CHAPTER  II 

CULTURAL   NOMADIC   ECONOMY 

ii.     THE  CULTURAL  NOMADS.     When  the  collec- 
tor  began  to  cultivate  animals  and  plants,  he  took  a 
great  forward  step.     Formerly  he  had  just  appro-  Earliest 
priated  what  nature  had  provided;  now  he  undertook  economic 

,  ,   .  ,  .f  cultures 

to  improve  upon  her,  to  cultivate  her  girts  system- 
atically. In  doing  this  he  insured  himself  against  the 
irregularities  of  unplanned  growth.  He  became  a 
herder  and  a  gardener.  These  are  the  earliest  eco- 
nomic cultures.  In  studying  them  we  are  dealing 
with  the  very  beginnings  of  material  culture  (cultiva- 
tion), which  is  itself  so  closely  connected  with  the 
development  of  civilization  in  general. 

Man's  advance  has  always  come  through  a  con- 
quest over  nature.  During  the  collectional  stage,  man 
used  fire  to  improve  on  nature's  gifts — that  is,  to  Confiuest 
cook  his  food  to  make  it  more  palatable,  and,  we  may  nature 
add,  more  sanitary.  Man  stored  his  food  from  season 
to  season,  to  provide  against  a  time  when  nature  was 
most  niggard.  He  fashioned  weapons  and  tools  to 
make  himself  master  of  the  field.  Now  in  this  new 
stage  he  undertook  to  guide  the  lives  of  animals  so 
that  they  would  better  serve  his  needs,  to  drive  them 
hither  and  thither  to  feed,  and  to  protect  them  at 
night  from  devouring  enemies.  He  also  undertook 
to  direct  the  growth  of  plants,  putting  some  here  and 
some  there,  fighting  their  battles,  with  other  plants, 

23 


24      INTRODUCTION  TO  ECONOMIC  HISTORY 


and  with  the  beasts  of  the  field  and  the  birds  of  the 


Wander- 
ing about 


Collec- 
tion and 
cultiva- 
tion com- 
bined 


Herders 


air. 


In  this  stage,  as  in  the  earlier,  man  was  nomadic. 
This  was  partly  because  he  had  been  accustomed  to 
moving  about  in  the  collectional  stage,  but  more 
especially  because  he  needed  to  secure  fresher  and 
richer  pastures  elsewhere,  or  better  arable  lands  in 
another  district.  Fear  played  a  great  part  in  the  lives 
of  all  early  peoples,  and  often  caused  them  to  move 
from  place  to  place.  Sometimes  it  was  fear  of  a 
powerful  neighbor,  sometimes  of  a  sickness  and  ver- 
min, and  sometimes  of  dreaded  evil  spirits.  Occa- 
sionally men  moved  with  all  their  belongings  to  visit 
some  sacred  spot  or  village,  somewhat  as  the  Douk- 
hobors  in  western  Canada  in  our  own  day  have  gone 
in  search  of  the  Messiah.  At  the  very  tropics  it  was 
less  likely  that  men  would  move  far.  Nature  made 
it  both  difficult  and  unnecessary,  difficult  because  of 
luxuriant  growth  in  most  places,  and  unnecessary  be- 
cause of  the  abundance  of  food.  The  farther  away 
from  the  equator  you  go,  up  to  a  certain  point,  gen- 
erally speaking,  the  wider  the  wandering. 

It  should  not  be  forgotten  that  men  of  the  cultural 
nomadic  stage  retained  their  fondness  for  the  hunt, 
for  fishing,  and  gathering  wild  honey,  berries,  and 
herbs.  Often  the  food  so  secured  was  indispensable 
to  their  existence.  And  so  we  may  say  that  cultural 
nomads  are  distinguished  by  a  combination  of  three 
practices,  continuing  to  collect,  roaming  about,  and 
cultivating  systematically  a  large  part  of  the  things 
they  need. 

ANIMAL    CULTURE.     Most    peoples    of   the 


12. 


world  have  apparently  cultivated  animals  before 
plants.1  The  historic  peoples  of  northern  Africa,  of 
most  of  Asia,  and  of  Europe  became  herders  of  cattle 


CULTURAL  NOMADIC  ECONOMY  25 

and  swine  and  keepers  of  sheep  and  goats  (and  also 
occasionally  of  bees).  In  this  way  they  provided 
milk,  butter,  cheese,  and  flesh.  From  the  hides  were 
obtained  leather  and  wool  for  clothing  and  for  tents. 
The  oxen  were  beasts  of  burden  dragging  carts  and 
wagons  through  the  plains.  Horses,  probably  the 
last  of  the  animals  to  be  domesticated,  swift-footed 
horses,  bore  the  herders  to  the  pastures,  and  carried 
the  warriors  to  the  field  of  battle.  Such  are  the 
nomads  of  history  and  such  they  are  to-day.  Gen- 
erally the  term  "nomad"  is  applied  to  them  exclu- 
sively, the  keepers  of  animals  which  are  driven  here 
and  there  for  pasture,  but  we  shall  call  them  "pastoral 
nomads"  to  distinguish  them  from  the  nomads  who 
cultivate  only  plants. 

We  get  our  first  historic  evidence  of  nomadic  cul- 
ture from  a  very  early  period.  The  Hyksos,  or  About 
shepherd  kings,  left  Asia  to  conquer  Egypt  which 
they  held  for  many  generations.  And  the  Jews  under 
Abraham  left  the  Euphrates  valley  for  the  land  of  Jew8 
Canaan,  probably  as  nomads,  but  we  are  not  told 
that  they  possessed  flocks  and  herds  till  after  they 
had  returned  from  Egypt.  It  seems  that  the  peoples 
around  the  Arabian  desert,  including  both  the  Hyksos 
and  the  Jews,  were  from  remote  antiquity  pastoral 
nomads.  The  cave  dwellers  near  the  Red  Sea  at  the 
time  of  Christ  and  before,  were  nomads,  the  keep- 
ers of  sheep  and  cattle,  living  entirely  on  milk  and 
the  flesh  and  bones  of  their  herds  and  flocks.2  In  the 
same  general  district,  on  the  borders  of  the  Arabian  Arabs 
desert,  lived  the  Saracens,  who  at  a  later  date  were  A.D.  350 
pastoral  nomads  living  on  milk  and  flesh,  supple- 
mented by  herbs  and  birds.  Mounted  on  fleet  horses 
and  speedy  camels,  they  could  move  rapidly  to  attack 
and  as  rapidly  retreat.3 


2000- 

B.  C. 


26      INTRODUCTION  TO  ECONOMIC  HISTORY 


Bedouins 


Massa- 
getae,  sth 
century, 
B.  c. 


Alani 


About 
A.  D.  375 


Scythians 
of  the 
plain 


The  Arabian  desert  nomads  of  antiquity  are  repre- 
sented to-day  by  the  Bedouins,  or  the  people  of  the 
tent,  the  traditional  descendants  of  Ishmael,  son  of 
Abraham  and  Hagar,  who  still  pasture  their  flocks 
and  herds  and  for  whom  there  seem  to  be  no  stepping 
stones  to  higher  things  as  long  as  they  live  in  a  land 
of  scant  and  uncertain  rainfall. 

In  the  ancient  period,  nomadic  life  was  prominent 
in  the  district  north  of  the  Black  Sea  eastward  to  the 
Sea  of  Aral.  Herodotus  described  the  life  of  the 
Massagetae,4  as  did  Strabo  at  about  the  time  of 
Christ.5  The  latter's  description  shows  us  some  of 
the  people  living  in  the  marshes  as  collectors,  others 
in  the  mountains  and  plains  as  cultural  nomads.  In 
other  words,  we  see  here  the  transition  from  collec- 
tional  economy  to  cultural  nomadic  economy  where 
conditions  are  favorable  on  the  mountain-side  and  on 
the  plain. 

A  people  called  the  Alani,  living  north  of  the  Cas- 
pian Sea,  perhaps  descended  from  the  Massagetae, 
were  cultural  nomads  when  they  were  attacked  and 
divided  by  the  Huns.  They  had  no  cottages,  lived 
solely  on  milk  and  meat,  and  went  enormous  distances 
on  their  canopied  wagons,  driving  before  them  their 
flocks  and  herds.  By  means  of  their  horses  they  not 
only  easily  cared  for  their  cattle  and  sheep,  but  hunted 
and  plundered  over  wide  areas.  The  western  section, 
cut  off  by  the  Huns,  eventually  joined  the  Vandals" 
and  moved  to  Spain  and  northern  Africa.  The  east- 
ern division  remained  near  the  Caspian  Sea,  where 
they  are  to-day. 

In  the  ancient  period,  these  pastoral  nomads  were 
called  the  "Scythians  of  the  plain."  Their  successors 
in  the  same  general  district  are  known  to-day  as  the 
Kirghiz,  still  nomads  and  very  numerous. 


CULTURAL  NOMADIC  ECONOMY  27 

The  Huns,  already  mentioned,  are  one  of  the  most 
interesting  of  pastoral  nomadic  peoples,  because  they  Huns 
played  so  important  a  part  in  the  history  of  Europe.  A.£U3 
Their  treatment  of  the  Alani  was  typical:  they  rode  453 
roughshod  over  all  their  enemies  whether  obscure 
tribesmen  or  imperial  Romans.  Cities  were  taken 
and  plundered  and  the  inhabitants  put  to  the  sword. 
Conquered  peoples  that  survived  the  campaign  were 
compelled  to  pay  tribute.  We  must  not  think  of  the 
Huns  as  very  exceptional,  for  they  constituted  but 
one  of  the  many  peoples  living  in  the  plains  of  Asia, 
who  were  a  scourge  to  the  neighboring  stales  having 
a  culture  higher  than  their  own,  to  China,  India, 
Persia,  and  the  eastern  and  western  Roman  Empires. 
Contemporary  writers  emphasized  their  personal 
ugliness  and  their  collective  mobility.7  Putting  the 
various  statements  together,  we  may  call  them  "pas- 
toral nomads,"  still  depending  a  great  deal  on  col- 
lecting roots  and  killing  wild  animals.  The  men  rode 
on  horseback  and  the  women  in  wagons,  presumably 
drawn  by  oxen.  It  is  to  be  inferred  that,  like  other 
Tartars  from  the  northern  and  eastern  borders  of 
China,  they  possessed  not  only  horses  and  oxen  but 
also  sheep,  from  the  wool  of  which  their  warm  tents 
and  wagon  covers  were  made.  Occasionally  they  had 
camels,  asses,  and  mules.8  Their  chief  food  was 
mare's  milk,  supplemented  by  the  flesh  of  the  animals 
of  the  flock  that  died  of  age  or  disease,  and  of  the 
beasts  of  the  chase.  In  hunting  they  were  specially 
skillful;  one  contemporary  writer  says  it  was  their 
only  art.  Indeed,  according  to  tradition,  it  was  in 
following  a  doe  that  they  crossed  the  great  swamp 
north  of  Crimea  and  learned  of  the  western  European 
world  that  was  to  offer  to  them  a  new  field  of  con- 
quest. Their  daily  life,  like  their  whole  civilization, 


28      INTRODUCTION  TO  ECONOMIC  HISTORY 


Mounted 
nomads 


North 
Africa 

1000-800, 
B.  c. 


was  based  upon  the  horse,  which  was  the  source  of 
their  food  (mare's  milk),  an  aid  in  hunting  and  herd- 
ing, and  an  instrument  of  war  enabling  them  to  attack 
with  great  vigor,  suddenly  to  retreat,  and  to  return 
to  the  conflict  till  their  object  was  attained. 

The  horse  was  so  important  to  the  nomad  that  its 
possession  constituted  a  superclass,  the  mounted  nom- 
ads of  history.  The  simple  nomad  with  no  horse  to 
enable  him  to  sweep  across  the  plains  has  had  little  or 
no  recorded  history;  the  mounted  nomad,  however, 
has  made  himself  a  place  in  the  annals  of  advanced 
peoples  by  the  fierceness  of  his  raids  upon  the  borders 
and  the  persistency  with  which  he  has  knocked  at  the 
very  gates  of  the  highest  civilization. 

In  northern  Africa,  west  of  Egypt,  we  find  another 
area  where  pasturing  developed  early  and  still  remains 
the  most  important  pursuit  of  the  natives.  In  Ho- 
mer's Odyssey,  it  is  said  that  no  man,  whether  prince 
or  peasant,  lacks  cheese,  meat,  or  sweet  milk  in  this 
district.9  In  the  5th  century  B.  c.,  a  certain  people 
in  northern  Africa,  relatively  populous,  left  their 
flocks  and  herds  upon  the  seashore  in  the  summer 
time,  to  go  inland  to  gather  dates  and  to  catch  locusts. 
The  locusts  were  dried,  ground  into  powder,  and 
sprinkled  upon  their  milk.10  Thus  did  they  combine 
the  old  collectional  with  the  new  cultural  nomadic 
pursuits.  At  the  time  of  Christ,  nomads  were  de- 
scribed who  fought  one  another,  neglected  to  kill  wild 
beasts,  and  lived  a  life  of  continual  change.  They 
were  sparing  eaters,  living  on  roots,  milk,  and  cheese, 
and  only  slightly  on  flesh.11  A  dandified  nomad  people 
lived  in  Mauretania  at  the  same  time,  who  plaited 
their  hair,  carefully  trimmed  their  beards,  cleaned 
their  teeth,  and  pared  their  nails.12 

At  the  present  time  the  nomads  of  Algeria  pursue 


CULTURAL  NOMADIC  ECONOMY  29 

the  old  course  of  life  so  long  Identified  with  northern  Algerian 
Africa.  To-day  they  fight  on  horseback  and  to-mor- 
row they  load  their  belongings  on  their  camels  and 
move  on  to  better  pastures.  They  eat  milk  and  cheese, 
dates  and  figs,  honey,  berries,  and  acorns,  and  occa- 
sionally flesh.  They  make  their  cakes  generally  of 
barley,  which  they  obtain  by  trade.  The  Algerian 
nomad,  indeed,  is  a  great  trader,  exchanging  raw 
wool  and  woolen  stuffs  and  tapestries  not  only  for 
barley  but  also  for  wheat.  But  the  market  place  of 
the  northern  town  has  no  charm  for  him;  his  vision 
is  restricted;  he  does  not  breathe  freely.  He  loves 
the  free  life  of  the  open,  even  to  the  borders  of  the 
Sahara.  Certainly  his  love  of  country  is  not  due  to 
his  great  wealth,  for  apart  from  his  flocks  and  herds 
he  has  but  few  possessions — his  tent,  carpets,  cover- 
lets, bags  for  provisions  and  valuables,  wooden  plates 
and  trays,  earthen  or  metal  pots,  wooden  or  earthen 
cups,  coffee  pot,  milk  vessels,  skin  water-carrier,  pick- 
axe, hatchet,  spade,  flour  mill,  wool  comb,  loom,  and 
ropes.  All  these  he  can  carry  on  the  march  with  his 
wives  and  his  children.  Within  the  tent  he  is  absolute 
master.  His  wives  are  his  servants.  There  is  but 
little  religion,  though  what  exists  is  of  the  fanatical 
type.  And,  of  course,  there  are  no  churches  and  no 
schools.  Theoretically,  the  individual  may  depart  if 
he  will,  but  practically  this  means  death  in  the  desert, 
for  without  the  cattle  and  sheep  that  belong  to  the 
group,  the  individual  must  starve.13 

In   southwestern   Africa,    a   Bantu   negro   people, 
called  Hereros,  live  a  purely  pastoral  nomadic  life.    South- 
They  glory  in  their  cattle,  rarely  killing  them,  but  Africa" 
living  on  their  milk,  about  six  quarts  of  which  an  adult 
male  will  drink  each  day,  not  sweet  but  sour.     The 
remainder  of  their  food  is  obtained  from  ground  nuts, 


30      INTRODUCTION  TO  ECONOMIC  HISTORY 

roots,  and  tubers,  and  from  game.  As  usual,  the 
ownership  of  the  cattle  is  vested  in  the  clan,  or  kin- 
ship group.  The  village  made  up  of  round-shaped 
tents,  has  as  center  the  calves'  pen,  about  which  the 
cows  lie  at  night.  The  whole  is  surrounded  by  a  kind 
of  temporary  palisade  of  thorn  bushes.  Like  their 
village,  their  whole  life  centers  in  their  animals.  It 
has  been  remarked  that  while  they  have  no  separate 
words  for  the  colors  of  the  sky  and  of  the  grass, 
every  tint  of  their  cattle,  sheep,  and  goats  can  be 
nicely  defined.14 

But  the  great  pastoral  area  of  Africa  is  neither 
South-        jn  the  north  nor  the  southwest  but  in  the  southeast, 
Africa       where  the  Masai,  Bahima,  Banyoro,  and  Galla  peo- 
ples have  large  flocks  and  herds.    Some  of  these  tribes 
will  not  eat  flesh  and  milk  on  the  same  day,  some 
will  not  use  a  combined  diet  of  vegetables  and  milk, 
believing  that  this  would  injure — not  man's  stomach 
but  the  cows'  udders,  and  some  despise  plants  as  food 
and,  of  course,  all  plant  cultivation.15 

In  southern  India,  there  is  a  striking  example  of  a 
Southern  purely  pastoral  nomadic  people,  the  Todas.  The 
chief  food  of  this  people  is  milk,  berries,  and  roots, 
with  some  grain  obtained  from  a  neighboring  tribe. 
Agriculture  they  despise,  though  their  chief  animal, 
the  buffalo,  might  easily  drag  the  plow  for  them. 
Because  of  their  poverty  they  kill  many  female  in- 
fants, or  at  any  rate,  they  did  till  recently.  This  has 
led  to  polyandry,  or  plurality  of  husbands.16 

From  the  tropics  of  southern  India  we  can  go  to 
the  arctic  regions  and  still  find  purely  pastoral  nom- 
ads, for  example,  some  of  the  Laplanders.  The  rein- 
deer is  the  cow  of  the  Lapps.  From  it  they  get  milk 
(small  in  amount  but  rich),  cheese,  and  flesh.  Most 
of  the  entrails  they  eat;  the  rest  of  them  going  to 


CULTURAL  NOMADIC  ECONOMY  31 

'the  dogs  that  watch  the  herds.  Wild  game,  fish, 
and  berries  supplement  the  food  obtained  from  the 
herds.  The  plant  angelica  they  relish  beyond  all 
rothers,  and  well  they  may  because  it  is  a  preventative 
of  scurvy.  Scant  indeed  are  the  possessions  of  these 
nomadic  Lapps.  They  have  no  permanent  dwellings, 
no  chairs,  and  no  tables,  only  kettles,  bowls,  spoons, 
a  lamp,  and  a  cradle,  besides  their  weapons,  skins, 
stores  for  the  winter,  and  their  herds  of  reindeer. 
One  boon  they  have,  their  natural  refrigeration,  which 
keeps  their  stored  food  almost  in  its  original  condi- 
tion of  freshness.  Doubtless,  this  is  the  original 
home  of  ice  cream.17 

Pastoral  nomads  cultivated  animals,  but  this  does 
not  imply  that  their  cultivation  was  of  a  very  high 
order.  Usually  the  animals  were  scraggy,  hardy 
beasts  more  ready  for  a  long  journey  than  for  inspec- 
tion on  the  market  place.  The  breeding  brought  out 
those  qualities  needed  for  the  life  the  nomads  led. 
For  instance,  the  horses  of  the  herders  living  on  the 
steppes  of  southern  Russia  had  wonderful  powers  of 
endurance,  going  great  distances  without  rest  or  Russia 
water.  They  also  possessed  marvelous  powers  of 
direction,  being  able  to  find  their  wray  where  no  guide- 
posts  or  paths  existed.  The  Arab  steed,  of  course, 
has  long  been  famous  for  its  fleetness  and  high  spirit. 

Pastoral  nomads  locate  on  the  mountain-sides  which 
are  rich  in  verdure  while  the  valleys  are  parched  by  L?catlon 

,  IT  ft  t  •    i      or    Pas' 

a  burning  sun;  or  on  the  edges  or  a  desert  in  which  tures 
there  is  somewhere  to  be  found  a  little  pasture,  not 
enough  to  last  long  but  enough  for  a  wandering  herd; 
or  on  the  plains  or  steppes  where  pasture  is  plentiful 
and  where  there  are  no  forests  and  few  ravishing 
beasts.  With  this  in  mind  we  may  well  wonder  why 
Australia  and  America  produced  no  purely  pastoral 


32      INTRODUCTION  TO  ECONOMIC  HISTORY 

peoples.  The  environment  was  favorable,  but  the 
natives  lacked  animals  suitable  for  cultivation.  In 
America  were  the  llama,  the  vicuna,  the  guanaco, 
the  alpaca,  all  allied  to  the  camel  tribe,  and  the  pec- 
cary or  wild  pig.  Some  of  these,  indeed,  were  used 
in  Central  and  South  America,  but  in  the  great  plains 
of  North  America  before  the  white  men  arrived,  only 
the  dog  was  domesticated,  and  it  was  rarely  used  for 
food.  One  may  raise  the  question  whether  in  due 
time  the  bison  of  the  plains  would  not  have  been 
herded  in  the  New  World  as  his  kinsman,  the  buffalo, 
was  in  the  Old. 

All  pastoral  nomads  are  mobile.  Some  go  but 
seasonal  shor(-  distances,  perhaps  only  up  and  down  the  moun- 
ments  tains.  They  have  opportunity  for  hunting  and  fish- 
ing and  tend  to  engage  in  plant  culture.  On  the  other 
hand,  the  wide  wanderers,  those  having  horses  or 
camels,  the  mounted  nomads  so  famous  in  the  history 
of  Asia,  Europe,  and  North  Africa,  go  long  distances- 
The  Kirghiz  of  southern  Russia  were  accustomed  to 
go  a  thousands  miles  northward  to  their  summer 
pastures  and  as  far  back  to  their  winter  camp.  Such 
nomads  could  do  but  little  fishing  on  the  way,  and 
showed  little  tendency  to  undertake  plant  culture.  If 
severe  weather  or  disease  killed  off  their  flocks  and 
herds,  they  seized  those  of  other  people.  Always 
ready  for  war,  they  sometimes  sought  it  by  plundering 
more  advanced  tribes  or  by  attacking  caravans. 

More  portentous  than  their  seasonal  movements 

.  are  their  migrations  to  find  new  lands,  involving  war 

tions          with  the  people  whose  territories  are  invaded.     The 

Jews  moving  about  north  and  east  of  the  Arabian 

desert  are  good  examples,  as  are  the  Huns,  the  Mon- 

\bo\it        g°ls>  ar"d  the  Turks.     And  their  leaders  have  been 

2100, B.C.    among  the  makers  of  political  history,  such  as  Abra- 


CULTURAL  NOMADIC  ECONOMY 


33 


ham,  the  traditional  founder  of  the  Hebrew  nation; 
Attila,  the  leader  of  the  Huns;  Jenghis  Khan,  con- 
queror of  much  of  China  and  indeed  of  much  of  west- 
ern Asia;  Batu  Khan,  leader  of  the  Golden  Horde18 
that  subdued  Russia  and  penetrated  far  into  central 
Europe;  and  Osman,  founder  of  the  Turkish  Empire. 

The  greatest  of  these  leaders  in  scope  of  oper- 
ations is  Jenghis  Khan.  The  first  few  years  of  his 
life  were  occupied  with  the  subjection  of  the  tribes 
in  his  own  native  land,  Mongolia.  Then  the  rest  of 
his  work  and  interest  was  centered  in  China  and  west- 
ern Asia.  All  of  China,  except  the  southern  and 
western  parts,  was  conquered.  Even  before  this  task 
had  been  completed,  Jenghis  Khan  entered  Turkestan, 
driving  before  him  the  Turkish  sovereign.  Cities  of 
considerable  culture,  such  as  Bokhara,  Merv,  Nish- 
apur,  and  Herat  were  all  pillaged,  as  was  the  world- 
famous  Samarkand,  seat  of  Arabic  culture  and  sacred 
to  the  Mohammedans.  As  if  he  desired  to  imitate 
Alexander  the  Great,  he  not  only  destroyed  Samar- 
kand but  entered  India,  and,  like  Alexander,  he  soon 
left  it  for  conquests  elsewhere.  He  marched  victori- 
ously through  Georgia  into  Russia,  plundering  the 
district  between  the  Don  and  the  Dnieper.  And  as  if 
he  had  done  his  duty,  Jenghis  Khan  then  returned 
homeward,  his  troops  and  servants  laden  with  booty. 
If  a  great  orderly  state  extending  from  the  Pacific 
Ocean  to  the  Caspian  Sea  had  been  permanently 
established,  we  should  have  been  grateful  to  Jenghis 
Khan,  but  many  of  his  conquests  were  as  rapidly  lost 
as  gained. 

A  great  warrior  the  cultural  nomad  has  certainly 
been,  also  a  great  trader.  Migration  frequently 
brings  him  into  touch  with  other  peoples,  and  his 
surplus  of  animal  products  is  large,  especially  wool 


Died  A.  D. 

453 
1162-1227 

Early 

i3th 

century 

Died 
1326 


Jenghis 
Khan 


Tra.i. 


34      INTRODUCTION  TO  ECONOMIC  HISTORY 

and  hides.  Frequently  he  enslaves  his  neighbors  to 
sell  them  to  other  peoples,  for  he  has  himself  little 
use  for  slaves  as  long  as  he  is  purely  a  pastoral  nomad. 
Some  of  the  great  slave  markets  of  the  world  have 
been  on  the  borders  of  the  districts  of  pastoral 
nomads. 

The  food  of  the  people  in  this  stage  might  be 
Foo(l  ample,  when  supplemented  by  herbs,  nuts,  and  ber- 
ries, but  in  fact  sometimes,  as  we  have  seen,  pastoral 
peoples  would  almost  confine  themselves  to  an  all- 
milk  and  flesh  diet,  sometimes  to  an  all-milk  diet. 
This  produced  a  large  body,  heavy  limbs,  and  a  pot- 
belly. It  is  a  probable  theory  that  men  lived  longer 
in  the  days  of  a  heavy  milk  diet  than  at  any  other 
time,  as  is  the  case  in  our  day  among  the  Bulgarian 
peasants.  The  possession  of  cow's  milk  was  an  in- 
surance against  a  heavy  infantile  mortality,  because 
when  a  nursing  mother  was  compelled  to  wean  her 
baby  early,  she  could  readily  put  it  on  cow's  milk, 
while  otherwise  she  would  have  to  give  it  solid  food 
at  a  time  when  such  food  is  dangerous.19  And  so 
more  children  might  be  born  to  a  mother  and  their 
chance  of  surviving  be  greater.  In  the  last  two  cen- 
turies, Europeans,  and  in  the  last  generation,  Amer- 
icans, have  been  trying  to  make  their  children  do 
without  miik,  or  to  get  along  with  scant  supply.  It 
is  only  by  a  strenuous  campaign  of  education  that  we 
can  be  brought  back  to  the  habits  of  our  forefathers. 

13.       PLANT   AND    ANIMAL    CULTURE.       Rarely,    if 

ever,  do  we  find  a  pastoral  nomadic  people  settling 
down  in  really  permanent  villages  without  first  prac- 
Pbnting  ticing  plant  culture  while  still  in  the  nomadic  stage. 
It  is  to  be  expected  that  a  people  so  fond  of  a  roam- 
ing life  as  the  nomads  and  so'scornful  of  plant  culture 
would  continue  to  move  about  while  the  feeble  begin- 


CULTURAL  NOMADIC  ECONOMY  35 

nings  of  the  cultivation  of  the  soil  were  made  by 
women  or  by  slaves.  Where  we  have  all  the  facts, 
this  apparently  was  always  the  case;  so  we  may 
regard  it  as  the  rule.  Thus  tillage  and  pasture  be- 
came the  two  breasts  from  which  the  infant  people 
derived  their  nourishment. 

One  of  the  earliest  recorded  instances  of  a  pas- 
toral nomadic  people  taking  up  plant  cultivation  and 
then  later  settling  down  is  that  of  the  Jews,  as  has  jews 
already  been  noted.  Probably  from  the  time  they 
left  the  Euphrates  Valley  and  certainly  from  the  time 
they  left  Egypt  to  return  to  the  land  of  Canaan  under 
the  leadership  of  Abraham,  they  were  keepers  of 
flocks  and  herds,  pitching  their  tents  where  pastures 
were  good  and  where  springs  were  found  or  where 
wells  could  be  dug.  But  the  land  they  had  come  to 
was  highly  civilized,  the  people  living  in  settled  vil- 
lages and  in  towns.  So  the  Jews  were  induced  to 
add  plant  to  animal  cultivation.  Doubtless,  at  first, 
both  pursuits  were  carried  on  without  giving  up  the 
roving  life.  How  long  this  was  the  case,  of  course, 
we  do  not  know.  Apparently  Abraham's  son,  Isaac, 
practiced  plant  as  well  as  animal  cultivation.20  In 
the  time  of  Isaac's  son,  Jacob,  there  was  a  strong 
tendency  to  settle  down,  and  to  intermarry  with  the 
native  population,  as  the  story  of  the  Shechemites 
indicates.21  In  due  time  the  Jews  settled  in  permanent 
villages,  but  there  were  some  of  them  who  looked 
back  to  nomadic  life  as  the  ideal.  It  was  apparently 
in  the  9th  century  B.C.,  that  this  reaction  took  place. 
The  Rechabites  were  ordered  by  their  lender  to  build 
no  house,  sow  no  seed,  plant  no  vineyard,  but  rather 
to  live  in  tents.22  They  were  to  worship  their  old  gods 
and  to  turn  from  the  god  of  the  Canaanites,  Baal,  the 
patron  of  settled  agriculture,  the  god  of  corn  and  wine. 


36      INTRODUCTION  TO  ECONOMIC  HISTORY 

The  love  of  a  roving  life  is  deeply  rooted  in  the 
Love  of  heart  of  man,  a  fact  that  is  eloquent  evidence  of  the 
long  period  and  ingrained  habits  of  the  two  earliest 
stages  of  human  history,  the  collectional  and  cultural 
nomadic.  To-day  the  Gypsies  persist  in  continuous 
migration  and  individuals  satisfy  something  deeply  hid- 
den within  when  they  go  off  on  a  "tramp,"  like  the  Rech- 
abites  of  old,  "strangers"  in  the  land  where  they  dwell. 
Most  of  the  peoples  of  antiquity  had  already 
emerged  from  this  phase  of  development  before  their 
history  begins — that  is,  they  had  passed  beyond  the 
plant  and  animal  phase  of  nomadic  economy.  Here 
and  there,  however,  we  find  some  who  had  added 
plant  to  animal  cultivation.  The  greatest  of  the 
Romans,  Julius  Caesar,  described  the  Germans  as 
Germans  primarily  pastoral  nomads  but  engaging  slightly  in 
plant  culture.  Most  of  their  food  consisted  of  milk, 
cheese,  and  flesh.  Every  year  land  was  assigned  to 
tribes  and  clans,  for  they  believed  that  they  must 
change  their  abode  annually  if  they  were  to  maintain 
their  vigor  and  warlike  habits.  The  worst  that  could 
happen  to  them  was  to  substitute  agriculture  for  war- 
fare, to  hold  landed  estates,  some  of  which  might  be 
larger  than  others,  with  the  resultant  feeling  of  social 
inequality,  to  come  to  love  money,  and  to  learn  to 
build  better  houses  against  the  inclemency  of  the 
weather.  One  group  of  German  tribes,  called  the 
Suebi,  living  in  the  valley  of  the  Weser  and  eastward, 
is  said  to  have  used  corn  but  not  to  any  great  extent, 
to  import  (practically  to  drink)  no  wine  whatever, 
to  be  frequently  engaged  in  hunting,  and  to  possess 
horses  which  rendered  them  mobile  in  war.  It  was 
men  of  such  habits,  strong  in  body  and  clean  in  their 
sexual  life,  that  for  so  many  centuries  threatened  the 
Roman  Empire  and  finally  overthrew  it.23 


CULTURAL  NOMADIC  ECONOMY  37 

In  Ethiopia,  south  of  Egypt,  there  were  nomads  E.thi°- 
caring  for  their  flocks  and  herds  and  growing  barley  * 
and  millet.  They  still  found  it  necessary  to  rely  upon 
the  pursuits  of  the  collector,  to  hunt  game  and  gather 
tender  twigs  of  trees,  the  lotus,  and  roots  of  reeds. 
This  was  at  the  time  of  Christ.24  Few  of  the  Ethiopi- 
ans have  gone  much  beyond  this  stage  of  civilization 
at  the  present  time.  The  Dinkas  on  the  upper  Nile 
are  somewhat  in  advance  of  the  Ethiopians  of  the  ear- 
lier period.  The  men  breed  cattle,  sheep,  and  goats, 
and  do  a  little  hunting,  especially  of  the  wildcat,  hare, 
and  turtle;  while  the  female  slaves  cultivate  plants.25 

In  northern  Africa,  in  Algeria,  there  is  a  marked  Algeria 
tendency  for  the  pastoral  nomads  to  undertake  a  little 
plant  cultivation.     The  pressure  of  population  on  a 
scant  soil  is  very  real,  and  the  French  government 
does  what  it  can  to  help  on  the  movement. 

In  India  there  are  many  instances  of  a  pastoral  no-  india 
madic  people  having  become  cultivators  of  plants 
without  giving  up  their  migratory  habits.  The  San- 
tals  of  Bengal  have  cattle,  goats,  pigs,  and  fowl,  and 
till  the  soil.  After  caring  for  their  crops,  they  hunt 
in  the  woods.20 

On    the    steppes    of    southern    Russia,    nomadism   southern 
seems  to  persist  with  its  old-time  vigor.     But  among  Russia 
the  Kirghiz  of  Fergana  we  find  a  beginning  of  plant 
culture.     The  herders  take  their  animals  as  high  as 
15,800  feet  up  the  mountain  side,  while  they  leave 
slaves  and  laborers  at  about  8,500  feet  to  cultivate 
for  them  wheat,   millet,   and  barley.      Part   of   the 
winter  they  spend  in  the  valleys.27 

14.  EXCLUSIVELY  PLANT  CULTURE.  Some  peo- 
ples left  the  collectional  stage  and  entered  the  cultural 
nomadic  stage  by  cultivating  plants  only.  One  of  the 
best  illustrations  of  this,  probably  in  the  whole  world, 


38      INTRODUCTION  TO  ECONOMIC  HISTORY 

is  found  in  some  North  American  Indian  tribes.  In 
Canada,  along  the  St.  Lawrence,  as  early  as  1635, 
North  the  Indians  were  said  to  cultivate  maize,  but  with  the 
Indians*  best  intentions  in  the  world  they  were  unable  to  resist 
the  temptation  to  abandon  their  crops  for  a  time  to 
go  fishing.28  The  Jesuit  missionaries  regretted  that 
the  Indians  were  "wanderers,"  for  it  was  so  difficult 
to  convert  them  to  Christianity  when  they  were  now 
here,  now  there.29  And  it  is  a  noteworthy  fact  that 
gradually  since  the  coming  of  the  whites,  the  Indians 
have  settled  down  in  permanent  villages.  In  New 
England  the  colonists  frequently  observed  the  plant 
culture  of  the  Indians.  An  Indian  family  had  an 
acre  or  more  to  cultivate.  After  having  joined  with 
neighbors  to  break  up  the  ground,  it  further  prepared 
the  soil  with  a  hoe  made  of  wood  topped  by  a  clam- 
shell. Women  and  children  kept  off  the  birds  and 
weeds.  Most  of  the  work,  indeed,  was  done  by  the 
women,  who  had  been  the  chief  ones  interested  in 
gathering  plants  in  the  collectional  stage.  In  the 
winter  the  Indians  lived  in  a  protected  district  near 
a  lake  or  stream;  in  early  spring  they  moved  to  some 
fishing  place;  and  it  was  only  as  summer  approached 
that  they  went  to  their  cornfields.30 

So  far  as  is  known,  the  North  American  Indians 

cultivated  no  animals — that  is,  they  neither  pastured 

nor  bred  them.    This  seems  to  have  been  true  also  of 

the  various  Indians  of  Mexico,31  of  the  Chibcha  In- 

Others       dians  of  Columbia,32  and  probably  of  such  people  of 

without      the  tropics  of  the  Old  World  as  the  Niam-Niam  and 

floc.k'         the  Monbuttoo  negroes  of  Central  Africa.33     Few 

and  herds  111  r  11        •          i 

other  known  peoples  developed  out  or  the  collectional 
into  the  cultural  nomadic  stage  without  at  some  time 
or  other — uninfluenced  by  the  whites34 — having  cul- 
tivated animals  as  well  as  plants.35 


CULTURAL  NOMADIC  ECONOMY  39 

There  is  some  evidence  to  indicate  that  if  the  Aus- 
tralian aborigine  had  had  a  longer  time  to  develop  Australia 
his  economic  system,  he  would  have  become  a  plant 
cultivator.  Certainly,  he  made  a  beginning,  even 
though  a  feeble  one,  when  in  digging  yams  he  returned 
the  heads  to  the  soil  to  produce  another  crop.  This, 
however,  was  followed  by  no  hoeing,  weeding,  or 
tending  of  any  kind.  But  it  was  a  promise  of  the 
future. 

15.  GENERAL  ATTAINMENTS  OF  CULTURAL  NOM- 
ADS. It  is  difficult  to  make  any  very  general  state- 
ment concerning  the  food  of  the  cultural  nomads  Food 
except  that  it  was  more  assured  than  in  the  earlier 
stage.  It  may  not  have  been  more  varied  than  that 
of  the  collectors,  but  it  was,  at  any  rate,  more  depend- 
able. It  must  be  remembered  that  men  still  had  many 
collectional  habits,  and  that  to  the  game,  wild  plants, 
and  honey,  were  added  dairy  supplies,  flesh  of  culti- 
vated animals,  and  many  cereals  and  roots  regularly 
planted  and  cared  for.  Not  all  of  these,  of  course, 
were  cultivated  by  all  peoples  in  this  stage,  but  some 
of  them  were  always  available. 

In  collectional  economy,  men  had  learned  to  store 
food  for  consumption;  in  the  stage   of  cultural  no-    storage 
madic  economy  they  stored  for  further  production  as   *or  Pro" 

11  r  •  TTTI  MI  i      •  duction 

well  as  for  consumption.  When  milk  was  made  into 
cheese  for  later  use,  consumption  was  provided  for; 
but  when  cattle  were  kept  over  winter,  provision  was 
made  for  further  production.  Wild  cereals  had  for- 
merly been  stored  for  future  use,  but  now  some  cereals 
were  laid  away  for  the  next  year's  seeds.  We  should 
never  forget  that  this  is  a  matter  of  great  impor- 
tance— for  general  as  well  as  material  culture,  for 
intellectual  as  well  as  economic  attainment.  Mod- 
ern science  has  taught  us  to  associate  closely  the 


40      INTRODUCTION  TO  ECONOMIC  HISTORY 

changes  of  man's  nature  with  the  changes  in  his  en- 
vironment and  in  his  economic  pursuits.  At  the  point 
when  our  ancestors  had  developed  the  foresight  suf- 
ficient to  provide  the  wherewithal  for  continuous 
cultivation,  they  may  be  regarded  as  possessing  one 
of  the  elements  necessary  for  our  modern  economic 
life,  saving  for  the  future.  This  is  the  foundation  of 
our  present  capitalistic  system,  though,  of  course,  it 
was  slow  in  reaching  even  its  present  maturity. 

In  this  stage,  as  in  the  earlier,  there  was  no  thought 

Property  o£  individual  as  distinct  from  family  or  clan  prop- 
erty in  land.  Ownership  of  some  personal  prop- 
erty probably  existed  from  the  first,  but  the  amount 
of  personal  property  was  still  small,  apart  from  flocks 
and  herds,  and  these  were  always  vested  in  the  group 
and  not  in  the  individual. 

The  group  rather  than  the  individual  constitutes 
the  basis  of  this,  as  it  did  of  the  earlier  stage  of 
development.  The  smallest  group,  in  this  stage  not 
so  distinct  as  later,  was  the  undivided  family,  made 

Family  up  of  father,  mother,  unmarried  children,  and  mar- 
ried sons  with  their  wives  and  children.  Then  came 
the  camp,  consisting  of  several,  five  or  ten,  more  or 
less,  of  these  families.  Several  camps  constituted  a 
clan,  or  kinship  group,  and  several  clans  a  tribe. 
Among  the  pastoral  nomads  of  Asia,  several  tribes 
would  form  a  folk,  and  several  folks  a  horde  with  a 
khan  as  sovereign,  for  instance,  the  Golden  Horde  of 
which  Batu  was  khan  in  the  thirteenth  century.36 

Variety  Man  had  more  varied  occupations  in  this  stage. 

in  work  Not  all  of  his  time  was  spent  in  getting  the  day's  food. 
More  of  it  than  ever  before  was  devoted  to  manufac- 
ture,37 trade,  and  war.  In  these  respects,  as  in  others 
already  noted,  we  feel  that  the  cultural  nomad  was 
more  nearly  approaching  our  present  order  of  life. 


CULTURAL  NOMADIC  ECONOMY  41 

Throughout  the  stage  there  was  a  ceaseless  struggle 
between  polygyny  and  polyandry  and  between  free- 
dom and  slavery.  The  important  work  of  cultivating 
or  hunting  animals  was  man's  business,  and  accord-  Marriage 
ingly  women  were  at  a  discount,  though  they  were 
still  useful  for  collecting  herbs  and  roots.  Accord- 
ingly, a  group  of  men  would  take  one  wife  (poly- 
andry), the  surplus  of  women  being  kept  down  by 
killing  female  infants.  But  there  were  forces  at  work 
making  for  polygyny.  When  a  tribe  was  rich  in  ani- 
mals, every  man  could  enjoy  the  luxury  of  at  least 
one  wife.  And  when  the  tribe  was  engaged  in  fre- 
quent warfare,  it  was  almost  necessary  for  a  man  to 
have  more  than  one  wife,  so  that  the  birthrate  would 
be  high  to  make  up  for  the  waste  of  life  involved  in 
warfare.  Plant  culture  also  put  women  at  a  premium, 
for  men  disliked  the  drudgery  involved.  Accordingly, 
a  man  sought  two  or  more  wives  to  work  in  the 
gardens. 

Hand  in  hand  with  this  went  the  struggle  between 
freedom  and  slavery.  The  alternative  to  women 
cultivators  was  slaves,  male  or  female.  For  procur- 
ing slaves  the  cultural  nomad  was  very  favorably  slavery 
situated.  He  made  captives  in  war  and  was  well  able 
to  make  raids  on  his  neighbors,  stealing  women 
especially.  If  he  was  a  pastoral  nomad,  he  might 
sell  them;  if  he  cultivated  plants  as  well  as  animals, 
he  would  keep  them.  In  slavery  we  have  one  of  the 
great  advances  in  history,  for  it  meant  regular  labor, 
the  parent  of  our  systematic  industrial  life  of  the 
present  day.  No  free  man  in  early  times  could  bring 
himself  to  continuous  sustained  labor.  Only  women 
and  slaves — the  two  were  not  vastly  different — would 
work  from  morning  to  night  at  one  task. 

And  so  once  again  we  see  a  division  of  employment 


42      INTRODUCTION  TO  ECONOMIC  HISTORY 


of  eco- 
nomic 
activity 


based  on  sex.    The  man  cared  for  the  animals,  while 

Division     the  woman  cultivated  the  soil.     Although  it  is  true 

payments  tnat  eacn  nelped  the  other  somewhat,  the  division  of 

tasks  was  clearly  marked.     It  followed  the  lines  laid 

down  in  the  collectional  stage  when  men  hunted  and 

fished,  and  women  gathered  herbs  and  roots. 

It  should  be  remembered  that  three  economic  prac- 
tices characterized  the  people  in  this  stage:  (i) 
Summary  they  engaged  in  cultivation,  either  of  plants  or  ani- 
mals, or  both;  (2)  they  moved  about  from  place 
to  place;  and  (3)  they  supplemented  cultivation  by 
collectional  pursuits.  As  we  pass  from  stage  to  stage 
in  human  history,  taking  on  new  habits  and  engaging 
in  new  pursuits,  we  do  not  wholly  give  up  those  of  the 
preceding  stage.  And  so,  much  of  what  was  said  of 
men  in  the  collectional  stage  can  still  be  said  of  them 
in  the  cultural  nomadic  stage.  Janus-like,  the  cultural 
nomadic  stage  looked  both  forward  and  backward. 
It  was  a  step  beyond  the  old  and  a  step  toward  the 
new. 

16.     SUGGESTIONS  FOR  FURTHER  STUDY. 

1.  Are  modern  Gypsies  cultural  nomads? 

2.  Distinguish  "hunting  nomads"  (of  collectional  economy) 
from  cultural  nomads. 

3.  Is   it   preferable    to   call    this  stage   "cultural    nomadic 
economy"  rather  than  simply  "pastoral  economy"  ? 

4.  Read  Caesar's  Gallic  War,  books  IV  and  VI. 

5.  Collect  the  different  meanings  of  the  word  "culture." 
Consult  a  dictionary. 

6.  In  the  struggle  between  collectors  and  cultural  nomads, 
where  did  the  advantage  lie  ?    Why  ? 

7.  Illustrate:     (a)    some  culture   nomads  first  engaged  in 
animal  culture  (pastoral  nomads)  and  then  in  animal  and  plant 
culture  (pastoral  and  planting  nomads),  while  (b)  others  were 
concerned  only  with  plant  culture  (planting  nomads).     Which 


CULTURAL  NOMADIC  ECONOMY  43 

(a  or  b)  is  the  normal?     Which  was  found  in  America  and 
which  in  Europe,  Asia,  and  Africa? 

8.  Would  "hoe  culture"   (a  term  used  by  anthropologists) 
sufficiently  describe  the  plant  culture  of  this  stage? 

9.  If  there  had  been  wild  horses  and  wild  cattle  in  America, 
would  the  redmen  have  become  pastoral,  as  well  as  planting, 
nomads  in  the  course  of  time — without  any  interference  on  the 
part  of  whites?     What  influences  other  than  lack  of  horses 
and  cattle  would  have  worked  against  this  development? 

10.  Enumerate  the  economic  cultures,  other  than  nomadic, 
which  exist  to-day;  for  example,  fish  culture. 

11.  Which  economic  cultures  seem  to  be  diminishing  (ani- 
mal culture?),  and  which  seem  to  be  of  increasing  importance 
(forestry?)     Why? 

12.  Study    pastoral    conditions  in   such    lands   as   western 
United  States,  Argentina,   and  Australia.     Read   J.  Collier's 
The  Pastoral  Age  in  Australasia  (191 1 ),  chap.  II  and  others. 

13.  Are  the  American  rangers  and  ranchers  with  their  co\V' 
boy  servants  to  be  regarded  as  cultural  nomads? 

14.  Enumerate  and  explain  the  differences  between  Ameri- 
can cattle  ranchers  and  cultural  nomads  as  described  in  the  text. 
See  E.  Hough's  The  Story  of  the  Cowboy  (189?)  ;  A.  H.  San- 
ford's  Story  of  Agriculture  in  the  United  States  (1916),  chap, 
xx ;  and  Owen  Wister's   The   Virginian,  a  Horseman   of  the 
Plains  (1902.) 

15.  Compare   cultural   nomadism   with   modern   European 
emigration,  as  to  causes,  periodicity,  unit  of  people  migrating 
(individuals,  family,  or  clan),  and  results. 

1 6.  What  factors  tend  to  keep  people  in  the  cultural  no- 
rnadic  stage? 

17.  Which  is  probably  the  shorter  stage,  this  or  the  pre- 
ceding? 

1 8.  On  the  wanderings  of  the  Germanic  peoples,   see  C. 
Kingsley,  The  Roman  and  the  Teuton   (1863),  and  E.  Emer- 
ton  An  Introduction  to  the  Study  of  the  Middle  Ages   (375- 
814),  chaps.  III-VIII   (1888). 

19.  What  was  the  significance  of  the  horse  for  the  political 
life  of  nomads?     Name  some  mounted  nomads?     How  about 


44         INTRODUCTION  TO  ECONOMIC  HISTORY 

the  Cossacks?     Could  any  American  Indians  after  the  coming 
of  the  whites  be  called  mounted  nomads? 

20.  Read  Sir  Robert  K.  Douglas'  article  on  Jenghis  Khan 
in  the  Encyclopedia  Britannica. 

21.  A  strong  claim  can  be  made  for  collectional  economy 
as  a  stage  of  great  accomplishments  of  an  elemental  character. 
Can  such  a  claim  be  made  for  the  cultural  nomadic  stage  ? 

22.  Describe  a  day  spent  with  cultural  nomads.      Scene: 
breaking  up  the  winter  camp  for  migration  to  summer  pastures, 
the  chief  receiving  ambassadors  from  another  people  bearing 
an  invitation  to  trade,  women  planting  the  crops,  others  pack- 
ing up,  men  rounding  up  the  cattle,  others  repairing  wagons, 
a  few  men  making  weapons  at  the  forge  in  anticipation  of  war 
on  the  march.     Conceive  and  describe  other  such  scenes. 

23.  Do  you  observe  any  overlapping  of  economic  history, 
anthropology,  and  sociology?     Illustrate. 

For  further  detailed  work,  consult  the  books  and  articles  in 
the  notes  following. 

17.     NOTES  TO  CHAPTER  II 

i.  The  old  theory  was  that  early  peoples  went  through 
three  stages,  hunting  (collectional),  pastoral,  and  agricultural. 
This  was  the  view  of  Dicsarchus  (4th  century,  B.C.),  of  Varro 
(ist  century,  B.C.),  of  Condorcet  (1793),  List  (1841),  Nie- 
boer  (1900),  Vinogradoff  (1905),  and  Hobhouse,  Wheeler, 
and  Ginsberg  (1915).  In  1874,  however,  Gerland  asserted 
that  in  remotest  times  plant  culture  preceded  animal  culture, 
and  that  later  some  peoples  became  nomads  and  others  hunters. 
In  1875,  Hellwald,  and  in  1893,  Biicher,  doubted  whether 
the  traditional  three  stages  were  universally  true.  In  1896, 
Hahn  put  different  forms  of  plant  culture  before  animal  cul- 
ture. In  the  same  year  Grosse  held  that  the  pastoral  stage 
was  not  invariable.  In  1897,  B°s  placed  hoe  culture  before 
pasturing.  Pumpelly,  in  1908,  maintained  that  agriculture 
preceded  the  domestication  of  animals  in  prehistoric  Transcaspia. 

There  are  perhaps  four  different  categories:  firstly,  peoples 
in  the  Old  World,  about  whom  we  have  a  good  deal  of  infor- 
mation, who  were  first  collectors,  then  pastoral  nomads  gradu- 


CULTURAL  NOMADIC  ECONOMY  45 

ally  taking  up  plant  culture  while  still  nomadic,  then,  in  case 
they  progressed  far  enough,  settled  villagers  engaging  in  agri- 
culture; secondly,  peoples  in  the  New  World  who  passed  from 
the  collectional  stage  directly  to  plant  culture  while  still  nom- 
ads; thirdly,  a  large  group  of  Pacific  Ocean  peoples  about 
whose  early  history  we  have  little  certain  information,  the 
Chinese  (said  to  have  been  nomads  from  the  region  of  the 
Caspian  Sea),  Mexicans,  Peruvians,  Melanesians,  Polynesians, 
and  Micronesians,  except  that  they  were  found  engaging  in 
both  plant  and  animal  cultivation,  the  first  and  third  of  whom 
did  not  use  the  milk  of  their  animals,  and  the  last  five  of  whom 
did  not  use  the  animals  as  beasts  of  burden  in  agriculture  (See 
P.  R.  Bos,  "Jagd,  Viehzucht,  und  Ackerbau  als  Culturstufen," 
in  Internationales  Archiv  fiir  Ethnographic,  vol.  X  (1897);  PP- 
190,  197);  and  fourthly,  Egyptians,  Babylonians,  Assyrians, 
and  Syrians,  who  cultivated  both  plants  and  animals  and  used 
the  milk  of  the  latter.  In  the  fourth,  as  in  the  third  case,  we 
have  no  positive  information  as  to  whether  animal  or  plant 
cultivation  came  first.  It  may  be  that  one  environment  dictated 
that  animal  should  precede  plant  cultivation,  while  another 
environment  reversed  the  order;  or,  as  is  not  unlikely,  that  the 
two  sometimes  went  hand  in  hand,  animal  culture  carried  on 
by  man  and  plant  culture  by  woman. 

The  view  taken  here  allows  for  both  theories,  stressing  not 
the  precedence  of  animal  culture  or  of  plant  culture,  but  the 
fact  of  a  culture  of  some  kind  combined  with  movement  from 
place  to  place. 

2.  Strabo,  Geography  (Bohn's  Classical  Library),  vol.  Ill, 
pp.  202-203.     The  neolithic  cave-dwelling  peoples  of  Italy  are 
thought  to  have  been  pastoral.     T.   E.  Peet,   The  Stone  and 
Bronze  Ages  in  Italy  and  Sicily  (1909),  p.  87. 

3.  Ammianus  Marcellinus,  Roman  History  (trans,  by  C.  D. 
Yonge,  1862),  pp.  1 1 -i 2. 

4.  Herodotus,  History  (trans,  by  Rawlinson,  1910),  vol.  I, 
p.  109. 

5.  Strabo,  Geography    (Bohn's  Classical  Library),  vol.  I, 
pp.  454,  461,  471 ;  vol.  II,  pp.  220,  247-248. 


46         INTRODUCTION  TO  ECONOMIC  HISTORY 

6.  Ammianus  Marcellinus,  Roman  History  (trans,  by  C.  D. 
Yonge,  1862),  pp.  583,  622. 

7.  See  the  descriptions  by  Ammianus  Marcellinus,  Priscus, 
Jordanes,  and  Gregory  of  Tours. 

8.  The  inference  is  based  upon  the  assumption  that  the 
Huns  were  similar  to  the  Scythians  described  by  Hippocrates 
in  the  5th  century,  B.C.  (Airs,  Waters,  and  Places.     Genuine 
Works,  1849,  vol.  I,  p.  212),  and  to  the  Hiung-nu  of  Chinese 
history  (E.  H.  Parker,  A  Thousand  Years  of  the  Tartars,  1895, 
PP.  2,  5,  6). 

9.  Homer,  Odyssey  (trans,  by  G.  H.  Palmer,  1891),  p.  47. 

10.  Herodotus,  History  (trans,  by  Rawlinson,  1910),  vol. 

I,  P-  354- 

11.  Strabo,  Geography  (Bohn's  Library),  vol.  Ill,  p.  287. 

12.  Ibid.,  pp.  279-280. 

13.  A.   Bernard,   and   N.  Lacroix,  L'Evolution  du  Nom- 
adisme  en  Algerie  (1906),  pp.  114,  119,  207-208,  261-264,  272- 
275,  288-289. 

14.  F.  Ratzel,  History   of  Mankind    (1885-88,  trans,  by 
A.  J.  Butler,  1898),  vol.  II,  pp.  476-477;  J.  G.  Frazer,  To- 
temisrn  and  Exogamy  (1910),  vol.  II,  pp.  354-358. 

15.  J-  G.  Frazer,  Totemism  and  Exogamy  (1910),  vol.  II, 
PP-  514.  534,  540. 

16.  W.  H.  R.  Rivers,  The  Todas  (1906),  pp.  32,  38,  478, 
479,  515,  630. 

17.  J.  Acerbi,  Travels  through  Sweden,  Finland,  and  Lap- 
land (1802),  vol.  II,  pp.  49,  77,  105,  107-109,  182-189,  190- 
191. 

1 8.  For  description  of  his  camp,   see  W.  de  Rubruquis, 
Itinerarium  (1253),  in  Hakluyt's  Principal  Navigations,  vol.  I, 
(1903),  pp.  272,  273. 

19.  The  whole  subject  of  the  effect  of  an   all-milk  diet 
would   repay  careful   investigation.     There  is,   of   course,   no 
question  about  the  value  of  the  milk  for  infants  but  much 
about  its  effect  on  adults. 

20.  Bible,  Genesis,  chap.  26;  12. 

21.  Bible,  Genesis,  chap.  34. 

22.  Bible,  Jeremiah,  chap.  35;  7« 


CULTURAL  NOMADIC  ECONOMY  47 

23.  Caesar,  The  Gallic  War  (trans,  by  H.  J.  Edwards), 
books  IV  and  VI. 

24.  Strabo,  Geography  (Bohn's  Library),  vol.  Ill,  p.  270. 

25.  G.  Schweinfurt,  The  Heart  of  Africa  (1878),  vol.  I, 
pp.  54-60. 

26.  J.  G.  Frazer,  Totemism  and  Exogamy  (1910),  vol.  II, 
pp.  300-303.     Cf.  F.  Ratzel.     History  of  Mankind  (1885-88, 
1898),  vol.  Ill,  p.  378. 

27.  J.  Peisker,  Cambridge  Medieeval  History  (1911),  vol. 

I,  p.  340. 

28.  Le  Jeune  in  Jesuit  Relations,  vol.  VIII,  pp.  33,  35. 

29.  Ibid.,  vol.  VI,  pp.  83,  147. 

30.  C.  C.  Willoughby,  "Houses  and  Gardens  of  the  New 
England    Indians,"    in   American   Anthropologist,   N.   S.,   vol. 
VIII  (1906),  pp.  125-131. 

31.  F.  Ratzel,  History  of  Mankind  (1885-88,  1898),  vol. 

II,  p.  179.     For  the  North  American  Indians,  see  above,  p.  32. 

32.  O.  F.  Cook,  "Food   Plants  of  Ancient  America,"  in 
Annual  Report  of  the  Smithsonian  Institution  (1903),  p.  493. 

33.  G.  Schweinfurt,  The  Heart  of  Africa  (1878),  vol.  I, 
p.   283,   vol.    II,   p.  39.     With   the   exception   of  the   North 
American  Indians,  the  peoples  mentioned  in  the  text  are  known 
only  after  they  had  settled  down,  but  the  absence  of  cattle  in 
the  village  stage  generally  indicates  their  absence  in  the  nomadic 
stage. 

34.  Good  illustrations  of  the  adoption  of  animal  cultiva- 
tion from  the  whites  is  found  in   North  America  in  the  case 
of  the  Navajos  and  in  South  America  in  the  case  of  the  Tobas, 
For  the  latter,  see  A.  Thouar.     Explorations  dans  I'  Amcrique 
du  Sud   (1891),  p.  66  f. 

35.  Other  peoples,  either  of  great  antiquity  or  known  only 
within   recent  times,   may   have  left  the  collectional  stage  to 
become  plant  cultivators  and  then  settled  down  in  permanent 
villages.     After   having  settled,   they   may   have  domesticated 
animals  to  supplement  plant  culture.     But  the  chief  point  of 
this  chapter  is  that,  while  still  nomads,  men  did  cultivate  sys- 
tematically either  plants  or  animals  or  both.     See  above,  chap. 
II,  n.  i,  and  below,  chap.  III. 


48         INTRODUCTION  TO  ECONOMIC  HISTORY 

36.  J.    Peisker,    Cambridge   Medieval    History,    vol.    I, 
(1911),  pp.  333-334- 

37.  Metal  working  among  some  cultural  nomads  has  been 
prominent  and  smiths  constitute  a  distinct  class  among  Arabian 
nomads. 


CHAPTER  III 

SETTLED    VILLAGE    ECONOMY 
I  8.       SETTLING  OF  THE  VILLAGE  GROUP.    Gradually 

and  reluctantly  the  cultural  nomads  settled  upon  the 
soil.  The  process  of  settlement  was  usually  long 
drawn  out.  At  first  they  settled  in  one  place  for  a  process 
period  of  from  five  to  ten  years,  and  then  moved  on  of  settle- 
to  another  place  after  having  exhausted  the  fertility 
of  the  soil.  These  we  may  regard  as  at  least  half 
settled.1  It  is  only  when  residence  in  one  spot  is 
continuous  from  season  to  season,  and  is  ostensibly 
permanent  from  year  to  year,  when  no  change  is 
contemplated,  or  is  part  of  the  regular  order  of 
events,  that  a  people  may  be  thought  of  as  really 
settled,  as  having  entered  the  stage  of  "settled  village 
economy."2 

In  the  collectional  and  cultural  nomadic  stages,  men 
lived  in  small  groups,  generally  clans,  for  purposes 
of  economic  production,  and  in  larger  groups,  ordi-  Nomadic 
narily  tribes  or  nations,  for  purposes  of  warfare,  fettle" 
Sometimes  the  clan  settled  down  in  one  village.  A 
large  clan,  however,  might  occupy  several  villages, 
while  many  clans  ravaged  by  famine  or  disease  might 
unite  to  form  a  single  village.3  Probably  there  was 
no  uniformity.  This,  however,  can  safely  be  said  that 
the  village  was  primarily — that  is  originally,  a  kinship 
group,4 

49 


50      INTRODUCTION  TO  ECONOMIC  HISTORY 

It  is  very  difficult  for  one  who  has  in  mind  the 
American  or  Canadian  "village,"  to  understand  the 
early  villages  that  were  formed  when  men  first  settled 
down  in  permanent  abodes.  The  village  group  of 
earliest  times  was  not  merely  a  collection  of  houses. 
It  was  a  group  of  people,  a  social  unit,  primarily  for 

village  a  .   e          r.        . r      .r  ...  J      ,. 

closely  economic  production  but  also  for  government,  reli- 
kmt  umt  gion,  and  social  intercourse.  It  was  not  a  place  with 
a  general  store,  an  inn,  and  a  post  office.  All  of  these 
were,  in  fact,  lacking.  Its  economic  function  was 
neither  trade  nor  traffic,  but  animal  and  plant  cultiva- 
tion. If  the  American  and  Canadian  farmers  had 
settled  down  in  villages,  rather  than  in  scattered 
homesteads,  the  difficulty  of  inducing  them  to  co- 
operate would  not  have  been  so  great.  Indeed,  some 
of  our  modern  co-operative  rural  societies  originate 
in  the  village  groups  of  the  Old  World,  which  in 
spite  of  centuries  of  individualism  round  about  them, 
have  maintained  a  co-operative  spirit. 

The  village,  however,  was  more  than  a  group  of 
village  as  persons;    it  gradually  became  a  territorial  area.     In 
torla""       tne  two  Preceding  stages    (the  collectional  and  the 
area          cultural  nomadic)   there  had  often  been  unoccupied 
zones  between  the  groups,  and  in  the  course  of  time, 
a  group  would  change  its  general  location.     The  vil- 
lage center,  however,  was  definitely  settled  on  some 
piece  of  land.  At  first  the  outlying  parts  would  be  no 
man's  land,  but  gradually  as  settlement  proceeded, 
and  the  old  village  groups  extended  their  areas  or 
new  ones  arose  as  offshoots  of  the  old,  the  village  area 
would  become  fixed. 

There  have  been  various  views  as  to  what  has  been 
Essentials  esser>tial  to  civilization.  It  has  been  maintained  that 
of  civi-  there  can  be  "no  civilization  without  milk,"  that  roots 
,/ation  ancj  cereais  have  been  indispensable,  that  man  has 


SETTLED  VILLAGE  ECONOMY  51 

risen  to  higher  things  on  the  back  of  a  horse,  that 
pottery  was  necessary,  and  also  the  alphabet.  It  is 
probably  safe  to  say  that  there  could  be  no  civilization 
without  permanent  settlement.  Until  man  had  settled 
down  there  could  be  only  a  limited  amount  of 
progress.  As  long  as  so  much  of  man's  attention 
and  efforts  was  occupied  in  moving  from  place  to 
place,  there  could  be  only  a  superficial  cultivation  of 
plants,  little  or  no  architecture,  and  no  considerable 
manufacture  without  permanent  workshops  and  tools 
heavier  and  more  complicated  than  could  be  carried 
from  place  to  place.5 

The  process  of  settling  down  has  been  a  long  one.   process 
It  has  occupied,  we  may  safely  infer,  ten  thousand   °fsettle- 
years  of  human  effort,  and  is  not  yet  completed.     All 
tradition  and  such  fragments  of  early  history  as  we 
have,  indicate  that  the  earliest  settlements  of  historic 
peoples  took  place  in  Egypt,  Babylonia,  and  China,   in 
several  thousands  of  years,  B.C.     The  Greeks  had  ^^nt 
already  settled  when  the  Iliad  was  composed  about 
1000  B.C.     The  traditional  founding  of  the  settled 
village  which  afterwards  became  Rome  was  in  753 
B.C.    The  Kelts  settled  in  about  the  5th  or  4th  century 
B.C.,  and  from  that  time  on  to  this,  hardly  a  century 
has  elapsed  that  has  not  witnessed  the  settlement  of 
at  least  one  important  people.     The  most  prominent 
historical  illustration  is  the  prolonged  wandering  of 
the    various    German    tribes    in    search    of    suitable 
lands  and  their  final  and  permanent  residence  in  the 
territory  which   they  have   since   occupied.      During 
the  first  century  A.D.,  the  Germans  were  settling  down 
along  the  eastern  and  northern  borders  of  Gaul.     In  In  west- 
the  5th  century  A.D.  the  West  Goths  settled  in  Spain,   Europe 
the  Franks  and  Burgundians  in  France,  and  the  Jutes, 
Saxons,  and  Angles  in  England.     And  in  the  6th  cen- 


52      INTRODUCTION  TO  ECONOMIC  HISTORY 


Slavs 


"Arabs" 


tury  the  Lombards  established  themselves  in  north- 
ern Italy.  In  the  next  few  centuries  the  Slavic  peoples 
settled  down,  approximately  where  they  are  to-day. 
These  same  Slavs  were  divided  into  groups,  the  south- 
ern Slavs  of  the  Balkan  Peninsula  and  the  northern 
and  eastern  Slavs  of  Bohemia,  Poland,  and  Russia, 
by  the  incoming  of  the  Magyars,  who  settled  in  Hun- 
gary in  the  loth  century  A.D. 

With  the  possible  exception  of  a  few  nomadic 
peoples  in  Russia  and  the  far  north,  the  processes 
of  settlement  in  Europe  are  complete.  But  in  Asia 
and  Africa  they  are  still  under  way.  One  notable 
Algerian  example  is  found  in  North  Africa.  The  Algerian 
"Arabs"  have  been  slowly  settling,  especially  in  the 
last  two  generations.  The  tent  is  giving  way  to  the 
house.  At  first  the  house  was  just  for  winter  resi- 
dence. During  the  summer  the  great  bulk  of  the 
Arabs  would  go  off  on  their  search  for  good  pasture 
lands,  leaving  a  few  agricultural  laborers  to  till  the 
soil.  Then  gradually  and  reluctantly  the  whole  people 
would  settle  down  in  a  village  with  their  houses  clus- 
tering around  their  most  valued  possessions,  their  live 
stock.6 

Both  among  the  Arabs  of  Algeria  and  the  Kirghiz 
of  southern  Russia,  one  of  the  most  prominent  causes 
of  settlement  is  the  loss  of  cattle.  In  other  instances, 
it  might  be  a  failure  of  the  crops,  sown  but  not  tended 
by  the  nomads,  or  just  the  inadequacy  of  the  old  meth- 
ods in  the  face  of  a  growing  population.  The  simple 
fact  that  even  early  peoples  could  easily  see,  is  that 
an  acre  of  ground  will  provide  for  more  mouths  when 
carefully  cultivated  than  when  used  for  pasture.  Such 
cultivation  can  be  carried  on  only  by  a  settled  com- 
munity. 

Sometimes,  as  in  Palestine,  the  factor  that  decided 


Causes 
of  settle- 
ment 


SETTLED  VILLAGE  ECONOMY 


53 


Place 
of  settle- 
ment 


First 
century 
A.  D. 


Nucleated 
(com- 
pact) 
village 


the  choice  of  a  village  site  was  a  well.  The  early 
Germans  settled  beside  a  spring,  or  plain,  or  grove 
that  pleased  their  fancy.7  In  the  French  Congo  to- 
day, a  hillock  on  the  bank  of  a  river  is  a  favorite 
spot,  a  place  where  water  is  accessible,  but  high  enough 
to  avoid  the  floods.  In  case  of  settlement  on  the 
borders  of  hostile  tribes,  the  location  would  be  deter- 
mined by  the  needs  of  defense.  But  everywhere  the 
prime  consideration  is  fertility  of  the  soil,  a  surface 
fertility  such  as  would  be  readily  available  under  early 
methods  of  cultivation,  which  utilize  only  the  first  few 
inches  of  the  ground. 

19.  FORM  OF  THE  SETTLED  VILLAGE.  One  gen- 
eral form  of  village  is  the  compact  or  nucleated  group 
of  houses.  It  is  without  any  special  arrangement, 
such,  indeed,  as  we  find  in  many  parts  of  Germany 
and  England.  It  has,  in  fact,  been  called  the  "heap- 
village,"  one  that  was  just  thrown  together  like  a 
heap.8  The  houses  lie  near  together,  each  with  its 
garden  close  at  hand,  and  here  and  there  is  a  path. 
Later,  as  transportation  develops,  the  main  paths 
become  roads. 

The  round  or  oval  village  belongs  to  the  same  cate- 
gory of  compact  settlements.  This  is  found  in  such 
widely  separated  lands  as  Russia9  and  New  Guinea.10 
The  short-street  village  is  also  compact  and  geograph- 
ically widespread.  We  see  it  in  the  French  Congo11 
as  well  as  in  China.12  Among  one  of  the  peoples  of 
New  Guinea,  the  short-street  village  has  the  form  of 
a  rectangle.13 

All  compact  villages  lend  themselves  to  defense.14   Defense 
The  houses  are  ordinarily  located  in  the  center  of  the 
village  area  to  which  all  can  easily  come  to  defend 
their  possessions.     Within   the  cluster   of  houses   is 
an  open  space,  commons  such  as  we  still  find  in  the 


Round 


54      INTRODUCTION  TO  ECONOMIC  HISTORY 


i  s 


SETTLED  VILLAGE  ECONOMY  55 

villages  of  Old  and  New  England.  Originally  this 
may  have  been  an  enclosure  into  which  the  flocks  and 
herds  were  driven  at  night,15  or  the  meeting  place 
near  a  sacred  tree  or  temple,  or  just  a  palaver  spot.16 
At  any  rate,  there  are  two  lines  of  defense,  one  at  the 
border  of  the  cluster  of  houses  and  the  other  at  the 
central  part  of  the  village.  Sometimes  we  find  that 
the  cluster  of  houses  is  removed  from  the  fields,  the 
former  being  on  the  mountain-side  and  the  latter  in  the 
valley.  Among  the  Berbers  of  North  Africa,  we  find 
the  houses  built  one  above  the  other  close  together,  Berber 
each  higher  up  the  hill  than  the  outlying  one,  so  that  V1  age 
each  house,  made  of  stone,  is  a  miniature  fort,  and  the 
village  thereby  able  to  withstand  its  enemies.  In  the 
case  of  one  tribe  of  the  same  people,  the  houses  are 
built  on  terraces  on  the  hillside,  so  that  each  row 
constitutes  a  distinct  line  of  defense.17  In  India  the 
village  nucleus  of  houses  is  surrounded  by  mud  walls 
which  serve  both  to  keep  off  marauding  bands  of 
thieves  and  to  resist  oppressive  tax  collectors.18  The 
Chinese  village  has  long  had  similar  defenses,  often 
allowed  to  fall  into  decay  but  quickly  repaired  when  Chinese 
trouble  draws  near.19  One  might  think  that  the 
slumbering  China  of  popular  tradition  would  need 
no  such  local  defenses.  However,  until  recently  China 
has  been  under  the  heel  of  foreign  conquerors  from 
the  north,  whose  rapacious  soldiers  and  agents  it 
might  be  advisable  to  exclude,  unless,  indeed,  they 
had  behind  them  the  authorization  of  the  Imperial 
Court.  And  at  the  present  time  owing  to  internal 
political  dissension,  the  walls  are  of  service  in  keeping 
out  robber  bands.  Among  the  Indians  of  New  Mex- 
ico and  Arizona,  the  defensive  side  of  the  villages  Indian 
was  so  prominent  as  to  lead  us  to  think  of  them  as 
towns,  as  the  Spanish  explorers  called  them.  They 


56      INTRODUCTION  TO  ECONOMIC  HISTORY 

were  often  built  on  a  precipitous  hillside,  access  to 
which  was  by  means  of  steps  cut  in  the  rocks.  The 
houses  were  entered  by  a  ladder  leading  to  the  roof. 
The  fields  of  such  a  village  might  be  far  away  in  the 
valley.  In  the  summertime  the  inhabitants,  or  many 
of  them,  would  live  in  temporary  huts  near  the  crops.20 
Of  late  years,  because  of  the  peace  that  the  American 
government  has  brought  to  these  peoples,  they  are 
deserting  their  fortified  villages  in  favor  of  their  sum- 
mer villages  near  the  fields. 

Besides  the  compact  village,  whether  fortified  or 
Non-nu-  unfortified,  there  is  the  village  that  is  well  spread  out, 
village  the  nouses  being  on  or  near  the  holdings  of  the  culti- 
vators. Such  a  village  is  still  a  group  of  persons,  still 
a  territorial  area  bearing  a  name,  still  capable  of 
some  kind  of  defense  because  of  its  common  interests 
and  common  feeling,  but  since  it  has  no  fortification, 
its  defense  is  very  weak.  Sometimes  the  farmhouses 
of  the  village  are  scattered  over  the  whole  area,  while 
a  few  buildings,  such  as  a  church  and  a  blacksmith 
shop,  as  well  as  a  marketplace,  may  form  a  center 
for  the  whole  village.  The  outstanding  fact,  how- 
ever, is  that  the  holdings  or  estates  are  themselves 
contiguous  units,  the  houses  and  fields  being  in  close 
proximity.  Such  a  type  of  village  occurs  frequently 
in  France  and  western  Germany,  and  is  apparently 
an  inheritance  from  the  distant  past.21 

Long-  The  long-street  village,22  non-nucleated  of  course, 

's  fa'rly  common  in  Europe,  and  is  found  also  in 
Quebec,  Nova  Scotia,  and  Maine.  One  goes  down 
the  main  street  or  road,  past  house  after  house.  He 
has  been  informed  that  he  is  in  a  village  bearing  such 
and  such  a  name,  and  that  the  next  village  is  a  mile 
or  two  away.  But  so  continuous  are  the  houses  that  he 
is  well  into  the  next  village  before  he  realizes  the 


SETTLED  VILLAGE  ECONOMY 


57 


58      INTRODUCTION  TO  ECONOMIC  HISTORY 


Hamlet 
groups 


Varia- 
tions and 
combina- 
tions 

Sub- 
villages 


Factors 
deter- 
mining 
form 


fact.  Such  villages  occur  along  the  seacoast,  near  a 
forest,  or  a  swamp.  In  such  cases  the  holdings  of  the 
cultivators  extend  in  parallel  fashion  down  to  the  sea- 
coast,  the  forest,  or  the  swamp.  Sometimes  where 
estates  are  divided  among  all  the  children,  the  hold- 
ings run  like  ribbons,  occasionally  for  miles,  wide 
enough  to  accommodate  only  a  house  along  the  road- 
side. 

Some  villages  are  made  up  of  hamlets,  and  may 
accordingly  be  called  "hamlet  groups."  The  hamlet 
itself  consists  of  from  two  to  five  or  six  houses,  and 
all  the  hamlets  lie  fairly  close  together.  In  the  north- 
western provinces  of  India,  we  find  such  villages.23 
In  Central  Africa,  one  people  formerly  living  in  pali- 
saded villages  now  live  in  hamlets  of  five  or  six  fam- 
ilies each.2*  And  in  Japan25  and  New  Guinea,26  such 
hamlet  groups  take  their  names  from  the  principal 
hamlet. 

There  are,  of  course,  many  variations  and  combina- 
tions of  these  two  types  of  villages,  the  nucleated  and 
the  non-nucleated.  A  variation  is  seen  in  India,  where 
we  find  sub-villages  on  the  outskirts  of  some  com- 
munities, like  the  "sub-urbs"  surrounding  our  towns. 
Here  live  the  outcasts,  certain  laborers,  servants, 
persons  of  ill-fame,  and  criminals.27  A  combination 
of  the  two  types  of  villages  is  found  on  the  Ivory 
Coast  of  Africa  among  the  Siena  negroes.  Here  we 
see  large  nucleated  villages  where  most  of  the  mem- 
bers of  each  family  reside,  while  the  other  members 
live  in  scattered  huts  from  five  to  twenty  miles  away, 
convenient  for  the  cultivation  of  their  holdings.28 

The  explanation  of  these  different  forms  is  not  a 
very  simple  matter.  Some  hold  to  the  view  that  one 
race  establishes  one  type,  another  race  another  type, 
for  example,  the  Germans  the  heap-village,  the  Slavs 


SETTLED  VILLAGE  ECONOMY  59 

the  round  and  street-villages,  and  the  Kelts  the  scat- 
tered village.20  Others  explain  these  variations  by 
the  peculiar  circumstances  of  settlement.30  The  neces- 
sity of  protecting  men  and  animals  from  marauders 
gives  rise  to  the  nucleated  village,  while  the  need  for 
protecting  crops  and  fields  from  birds  and  other  ene- 
mies leads  to  the  non-nucleated  village.  The  latter 
will  be  realized  only  in  case  there  is  peace  through 
lack  of  enemies,  or  through  protection  afforded  by 
conquerors.  So  we  have  as  conflicting  factors  leading 
to  different  types  of  villages,  war  and  animal  cultiva- 
tion on  the  one  hand  and  peace  and  plant  cultivation 
on  the  other. 

The  first  factors — that  is,  war  and  animal  cultiva-  Peace 
tion,  have  already  been  considered  and  are  more  or  cuiti-  * 
less  obvious.  The  latter  factors,  peace  and  plant  vation 
cultivation,  need  to  be  briefly  noted.  Among  the 
Bongo  negro  people  of  Central  Africa,  palisaded 
villages  under  chiefs  once  prevailed,  but  when  the 
people  were  conquered  by  the  Nubians,  they  changed 
from  villages  to  hamlets  of  five  or  six  families.31  The 
advantage  of  the  village  was  defense,  but  when  this 
was  no  longer  a  factor,  the  next  most  important  con- 
sideration was  the  crops.  Possessing  but  few  sheep 
or  cattle,  the  conquered  Bongos  were  chiefly  concerned 
with  living  near  their  fields.  Similarly  in  Madagascar 
to-day  the  nucleated  village  is  being  scattered  because, 
under  the  peaceful  regime  of  the  French,  there  is  no 
desire  but  to  be  near  the  fields.  Among  the  Niam- 
Niam  negroes  of  Central  Africa,  the  villages  are  of 
the  scattered  type.  These  people  have  no  flocks  or 
herds  but  are  devoted  to  their  crops,  near  which 
they  build  their  huts,  sometimes  at  great  inconveni- 
ence to  themselves,  for  they  may  be  far  from  the 
source  of  supply  of  both  water  and  firewood,  and 


60      INTRODUCTION  TO  ECONOMIC  HISTORY 


Public 
works  as 
the  fifth 
factor 


Soil  as 
a  factor 


Normal 
village 


always  they  expose  themselves  to  the  ravages  of  white 
ants.32 

Wherever  considerable  public  works  had  to  be 
undertaken  before  a  village  could  be  established,  such 
as  the  burning  of  jungle  land  to  clear  a  large  health- 
ful area  fit  for  human  habitation,  and  especially  where 
public  works,  such  as  are  involved  in  irrigation  sys- 
tems had  not  only  to  be  initiated33  but  to  be  main- 
tained, the  tendency  was  towards  a  nucleated  type  of 
village,  in  which  the  community  element  of  the  group 
was  strong.  When  living  near  together  men  could 
best  arrange  public  duties.  In  the  case  of  irrigated 
lands,  such  as  Egypt  and  Babylonia,  the  additional 
reason  prevailed  that  it  was  better  to  have  the  houses 
together  on  one  high  piece  of  ground  well  banked  up 
from  the  flood  waters,  and  connected  with  other  vil- 
lages by  dikelike  roads,  than  to  have  every  cultivator 
live  on  a  hill  or  high  piece  of  ground  and  to  have  his 
homestead  connected  with  other  homesteads  by  roads 
that  were  very  costly  to  maintain. 

Another  factor,  the  sixth  to  be  considered,  is  the 
nature  of  the  soil.  Where  the  soil  is  rich,  or  fairly 
fertile,  on  the  plains  or  in  broad  valleys,  the  nucleated 
village  is  established.  Here  the  whole  village  group 
can  find  a  patch  of  ground  sufficiently  large  to  provide 
every  household  with  an  adequate  space  of  arable 
land  and  of  pasture  and  woodland.  Here,  then,  we 
may  find  a  normal  situation,  the  typical  case.  Since 
the  first  settlements  were  on  the  best  lands  and  since 
animal  culture  was  of  great  importance  at  the  time 
of  settlement,  and  since  warfare  was  common  among 
the  settling  peoples  (especially  among  those  occu- 
pying the  best  lands,  who  naturally  had  to  defend 
themselves  against  those  about  to  settle),  we  may 
say  that  the  nucleated  form  of  village  was  the  rule, 


SETTLED  VILLAGE  ECONOMY 


61 


and  all  others  the  exception.  This  would  apply  to 
Europe  generally.  But  where  the  lands  were  poor, 
the  exceptions  would  be  numerous.  It  has  already 
been  noted  that  the  street  villages  were  near  a  marsh, 
a  forest,  or  a  seashore,  and  on  soil  often  unfertile. 
Thus  we  can  explain  the  form  of  the  early  villages, 
not  on  any  one  ground  alone,  but  on  all  those  men- 
tioned above.3* 

The  same  factors  that  led  to  the  establishment  of 
non-nucleated  villages,  have  made  for  the  creation 
of  scattered  homesteads  and  hamlets,  which  cannot 
be  regarded  as  villages  at  all.  In  Scandinavia35  we 
find  many  scattered  homesteads,  and  also  hamlets  of 
a  few  houses.  These  are  not  racial  peculiarities; 
they  were  not  established  by  choice,  but  because  only 
here  and  there  could  a  patch  of  fertile  ground  be 
found  sufficient  for  a  family,  or  a  very  small  group 
of  families,  rarely  enough  for  a  village  group.  The 
same  condition  is  found  in  northern  India,  and  in  some 
parts  of  China.36  In  Wales,  from  at  least  the  I2th 
century,  the  hamlet  has  prevailed,37  due,  probably, 
simply  to  the  barren  nature  of  the  soil. 

Here  then  is  a  great  force  at  work,  our  environ- 
ment. Man  seeks  to  better  his  economic  condition 
by  settling  down  in  villages.  The  type  of  village  he 
will  form  depends  on  the  conditions  in  which  he  finds 
himself.  His  preference  is  the  village  of  many  fam- 
ilies somewhat  like  the  group  of  the  cultural  nomads 
of  the  previous  stage.  But  in  some  places  his  habits 
and  those  of  his  ancestors  must  be  changed;  he  is 
compelled  to  content  himself  with  hamlets  or  scat- 
tered isolated  farmsteads. 

20.  FIRST  PHASE  OF  SETTLED  VILLAGE  ECONOMY: 
THE  FREE  VILLAGE.  In  the  history  of  settled  village 
economy  we  observe  that  there  are  two  phases.  In 


Scattered 
home- 
steads 


Natural 
environ- 
ment as  a 
factor  in 
economic 
history 


62      INTRODUCTION  TO  ECONOMIC  HISTORY 


Two 
phases  of 
village 
economy 


Classes 
in  the 
free 
village: 
Freemen 


Slaves 


the  first  the  village  was  free — that  is,  it  was  free 
from  a  lord.  No  nobleman,  no  bishop,  no  monastery 
claimed  a  whole  village  as  exclusive  property.  Polit- 
ical chiefs  existed  and  to  these  the  villagers  owed 
allegiance,  but  there  was  no  feudal  nobility,  no  class 
of  landed  aristocracy  collecting  rents  and  demanding 
services  from  the  whole  village.  In  the  second  phase, 
such  aristocracy  did  exist  and,  indeed,  when  the  phase 
was  well  developed,  there  was  no  land,  no  village, 
without  a  lord. 

In  the  free  village  there  were  two  general  classes 
of  people.38  The  first  and  more  important  was  made 
up  of  free  men,  the  normal  and  average  villagers. 
Some  of  these  might  own  more  land  and  more  cattle 
than  the  others,  and  be  more  skilled  in  war  and  sur- 
rounded by  more  military  followers  than  others. 
These  might  be  called  "nobles"  or  "barons,"  "men" 
par  excellence,  but  they  were  essentially  the  same  as 
the  poorer  freemen. 

In  the  village  that  was  free  as  a  village,  there  were 
people  who  were  not  free  as  individuals.  Slaves  had 
existed  in  the  cultural  nomadic  period  and  were  of 
much  greater  use  in  the  settled  village  because  of  the 
aversion  of  freemen  to  the  continuous  labor  which 
settlement  involved.  Some  of  the  slaves  had  been 
taken  in  war,  some  won  in  gambling,  some  bought 
from  nomad  slave  dealers,  and  some  born  as  the  chil- 
dren of  slaves.  We  must  not  think  of  these  slaves 
as  all  alike  in  their  subordination  to  their  masters. 
While  some  were  attached  to  the  person  or  house- 
hold of  their  owners,  others  were  allowed  to  cultivate 
land  partly  for  themselves  and  partly  for  their  lords. 

Some  slaves  won  their  freedom  and  these  freed- 
men  stood  as  visible  proof  of  the  possibility  of  chang- 
ing one's  status,  as  did  the  newly  enslaved  who  had 


SETTLED  VILLAGE  ECONOMY  63 

staked  and  lost  their  freedom  in  a  game  of  chance. 
But  our  main  interest  at  this  point  is  in  neither  slave 
nor  freedman  but  in  the  fact  that  the  free  man  was  Freemen 
the  typical  citizen  and  that  the  group   of  villagers  *yPicaI 
acknowledged  no  dependence  upon  a  lord.     There  is1 
no  need  to  dwell  at  length  upon  this  condition  because 
it  is  essentially  a  continuation  of  the  cultural  nomadic 
stage.    What  does  merit  attention  is  the  kind  of  culti- 
vation carried  on  in  the  free  village. 

The  earliest  free  villages  of  normal  development 
reflected  rather  closely  the  activities  of  the  previous 
cultural  nomadic  stage,  as  we  might  expect.     Animal  Animal 
culture  was  normally  all-important,  while  plant  cul-  cuhure3 
ture  was  occupying  a  larger  and  larger  place  in  the 
lives  of  the  people.     These  two  had  been  developed 
separately  in  the  nomadic  stage,  and  they  remained 
separate,  or  largely  separate  within  the  village,  for  a 
certain  time  during  this  first  phase  of  settled  village 
economy. 

During  the  cultural  nomadic  stage,  flocks  and  herds 
had  been  pastured  in  moving  from  place  to  place.  In 
the  stage  of  village  economy  they  were  provided  for  Village 
on  three  or  four  different  kinds  of  lands.  The  com-  F 
mons,  so  important  for  pasture  at  a  later  date,  were, 
when  the  village  settled,  little  more  than  a  pound  or 
resting  place.  The  waste  lands  on  the  outskirts  of 
the  village39  were  by  long  odds  the  most  important 
source  of  food  for  the  cattle,  sheep,  and  goats.  The 
arable  lands,  when  worked  out  and  abandoned,  were 
turned  over  to  the  animals  to  graze  upon,  as  one  can 
observe  to-day  in  Madagascar.  In  cold  climates  it 
was  necessary  to  provide  the  cattle  with  hay  in  the 
winter,  and  accordingly  the  hay  fields  or  meadows 
would  constitute  a  fourth  source  of  pasture  after  the 
hay  had  been  harvested. 


64      INTRODUCTION  TO  ECONOMIC  HISTORY 

In  some  countries,  where  it  was  possible  to  main- 
tain a  great  many  animals  in  the  village  during  the 
most  favorable  season,  arrangements  had  to  be  made 

Distant  to  pasture  them  elsewhere  during  the  rest  of  the  year. 
Although  this  may  be  regarded  as  the  exception  rather 
than  the  rule,  it  has  been  and  is  widespread,  existing  in 
ancient  times  near  Rome40  and  in  the  Delta  district  of 
Egypt,41  in  the  Middle  Ages  and  early  modern  period 
in  Spain,42  and  in  modern  times  in  the  Alps,43  in  Nor- 
way,44 the  Hebrides,45  and  the  American  Northwest.48 
While  men  occupied  themselves  during  this  phase 
of  village  economy  with  animal  culture  and  with  war, 

Plant  cul-  women  were  engaged  in  cultivating  the  fields  just  as 
in  the  nomadic  stage.  Sometimes  the  men  cut  or 
burned  down  the  trees  on  a  plot  of  ground,  leaving 
the  cultivation  solely  to  the  women.  Sometimes  they 
aided  the  women  in  planting  and  harvesting,  but  not 
in  the  care  of  the  crops.  At  any  rate,  plant  cultiva- 
tion was  woman's  occupation,  unless  it  was  perchance 
done  by  slaves  or  by  men  who  had  lost  all  their  cattle 
and  were  compelled  to  labor  indefinitely  for  others 
who  still  possessed  herds. 

In  the  case  of  the  non-nucleated  villages,  the  women 
would  cultivate  fields  near  their  homes,  as  they  do 
to-day  in  some  parts  of  the  world.47  But  in  the  more 

in  nu-       typical  case  of  the  nucleated  village,  all  the  cultiva- 

v'nfage  tion  would  be  done  in  one  field  set  aside  for  the  use  of 
the  whole  village;  it  might  be  at  some  distance  from 
the  houses.  This  single  field  would  be  divided  into 
as  many  holdings  as  there  were  families,  probably 
each  holding  being  compact — that  is,  in  one  piece. 
The  holding  of  each  family  would  be  little  more  than 
a  garden,  small  in  size,  cultivated  with  a  hoe  or  spade, 
and  not  manured.  The  crops  would  be  various, 
cereals  such  as  barley,  wheat,  rye,  or  millet,  pulse 


SETTLED  VILLAGE  ECONOMY  65 

such  as  beans  or  peas,  and  root  crops  such  as  manioc 
and  sweet  potatoes  in  the  warmer  regions.  There 
was  little  or  no  thought  of  conserving  the  fertility 
of  the  soil,  for  land  was  still  plentiful;  and  when  the 
one  big  field  or  tillable  area  was  worked  out,  it  was 
abandoned  to  the  herds  for  an  indefinite  period  and 
another  space  occupied  and  similarly  treated.  Indeed, 
the  whole  procedure  shows  but  little  advance  over  the 
plant  cultivation  of  the  nomadic  stage.  Apparently 
man  could  learn  only  one  thing  at  a  time.  The  prob- 
lems involved  in  settling  down,  and  especially  in 
providing  for  the  animals  under  new  conditions,  seem 
to  have  prevented  improvements  in  plant  cultivation. 
But  one  advance  is  apparent;  the  permanent  residence 
of  the  people  gave  an  opportunity  that  the  nomad 
did  not  have,  for  the  prevention  of  injury  to  the  crops 
by  weeds,  vermin,  and  birds.  This  was  largely  the 
work  of  women  and  children. 

Among  the  Kelts  of  Gaul  at  the  time  of  Christ,  the  Kelts 
women  were  said  to  be  giving  up  their  agricultural 
labor  to  the  men.48     This  was  made  possible  by  the 
peace  that  Rome  imposed  upon  the   Kelts.     About 
twelve  hundred  years  later,  we  find  the  Kelts  in  Ire-  of 

T        1         A 

land  in  substantially  the  same  condition  as  their  kins- 
men had  been  on  the  mainland.  They  were  living  in 
settled  villages,  doubtless  leaving  plant  cultivation  to 
the  women.  They  depended  chiefly  on  animal  cultiva- 
tion, but  nevertheless  they  did  sow  small  patches  of 
land.49  The  tillage,  however,  was  of  the  usual  super- 
ficial type.  About  the  same  time  (1190),  the  Kelts 
of  Wales  were  also  dependent  largely  on  their  flocks  Of  Wales 
and  herds.  Milk,  cheese,  butter,  and  flesh  constituted 
their  chief  food.  Oats,  however,  were  cultivated, 
doubtless  by  the  women,  for  the  men  were  almost 
constantly  engaged  in  war  or  martial  exercises.50 


66      INTRODUCTION  TO  ECONOMIC  HISTORY 

North  When  the  white  man  explored  and  colonized  North 

f  TanTn  America,  some  of  the  natives  were  in  this  first  phase 
of  settled  village  economy.  The  French  explorer 
Jacques  Cartier  in  1535  described  Hochelaga,  later 
Montreal,  as  a  settled  village,  the  inhabitants  of 
which  were  devoted  to  plant  cultivation,  the  women 
working  more  than  the  men.51  Many  Indian  tribes 
were  found  living  in  permanent  villages  and  subsist- 
ing largely  on  Indian  corn.52  Prominent  among  these 
were  the  Hurons  residing  near  the  great  lake  that 
now  bears  their  name,53  the  Armouchiquois  of  New 
England,54  the  Senecas  of  New  York  State,55  and  the 
Illinois  Indians.56  It  is  interesting  to  note  that  we 
have  used  the  North  American  Indians  to  illustrate 
the  collectional,  cultural  nomadic,  and  settled  village 
stages.  Nothing  could  more  clearly  indicate  the  dif- 
ferent conditions  of  their  material  culture.  Generally 
speaking,  those  to  the  east  and  south  were  more  ad- 
vanced than  those  to  the  north  and  west.  Progress 
had  been  made,  but  the  limit  was  probably  reached 
very  early  in  this  first  phase  of  settled  village  econ- 
omy, though  there  was  some  promise  of  further 
advance  among  the  Indians  of  the  lower  Mississippi 
Valley  where  the  men  were  engaging  in  plant  culture.57 
Free  vil-  Perhaps  there  are  no  better  illustrations  of  this 
Afn  '"  phase  than  among  the  negroes  and  Bantus  of  Africa. 
In  the  French  Congo  the  men  fell  the  trees  and  clear 
the  land  somewhat,  leaving,  however,  the  headless 
stumps  and  prostrate  trunks  lying  on  the  ground. 
Between  these  the  women  cultivate  their  crops.58 
Among  the  Nandi  of  Uganda,  we  find  the  men  not 
only  clearing  the  bush  but  helping  to  sow  and  even  to 
harvest  the  crops,  leaving  to  the  women  all  the  weed- 
ing.59 In  British  East  Africa  there  is  an  interesting 
case  of  animal  and  plant  cultivation  carried  on  by 


SETTLED  VILLAGE  ECONOMY  67 

different  peoples.  The  Bahima  (Bantus)  herd  cattle 
and  rely  chiefly  on  milk  for  food.  They  love  their 
cattle,  pet  them,  and  sometimes  on  the  death  of  their 
stock  they  are  said  to  commit  suicide  through  grief. 
The  Bahero  are  the  tillers  of  the  ground  and  slaves 
of  the  Bahima,  doing  the  work  performed  in  other 
places  by  women.00  Elsewhere  in  Africa,  indeed,  we 
find  the  natives  advanced  beyond  the  system  of  culti- 
vation we  are  now  dealing  with,  notably  the  Siena 
negroes  of  the  Ivory  Coast.61 

Forces  were  at  work  which,  without  greatly  affect-  Forces 
ing  the   free  status   of  the  village,   did  profoundly  ?negec™t'°~ 
change  the  nature  of  the  system  of  cultivation.     One   vation 
is   increase   in  population   and   the   other   a   greater 
amount  of  peace. 

The  cultural  nomad  had  frequently  broken  camp 
and  moved  on,  leaving  accumulations  of  filth  behind 
him.  The  settled  villager  was  compelled  to  remain  Health 
amid  the  unsanitary  conditions  that  his  carelessness 
and  ignorance  had  created.  The  mortality  was  very 
great  as  epidemic  after  epidemic  swept  over  the  land, 
bubonic  plague,  typhus,  pneumonia,  and  many  other 
diseases.  Often  as  these  have  come  and  gone,  no 
natural  immunity  has  been  developed.  Nevertheless 
in  the  stage  of  village  economy,  people  who  survived 
disease  gradually  developed  a  high  natural  resistance 
to  infection.  In  the  densely  populated  China, 
although  the  villages  are  filthy,  the  Chinese  have  come 
to  suffer  relatively  little  from  at  least  one  disease, 
smallpox,  which  is  so  common  but  no  longer  gener- 
ally fatal.62  In  the  village  stage  also,  people  were 
learning  some  few  lessons  of  healthful  living.  When 
wine  came  into  general  use  as  a  beverage,  an  im- 
portant step  was  taken;  as  also  when  boiled  water 
was  regularly  drunk,  notably  by  the  Chinese  in  the 


68      INTRODUCTION  TO  ECONOMIC  HISTORY 


Peace 
in  the 
villages 


Birth 
of  agri- 
culture 


Animal 
and  plant 
culture 
combined 


form  of  tea.  In  these  two  ways,  in  the  develop- 
ment of  natural  resistance,  and  in  the  learning  of 
some  few  lessons  of  sanitation,  man  lengthened  his 
span  of  life,  and  accordingly  population  increased. 

Coincident  with  increased  longevity  was  the  les- 
sened frequency  of  war.  Among  the  nomads  war 
had  been  almost  a  matter  of  the  day's  work.  But 
with  settlement  came  a  change  from  the  offensive  to 
defensive.  Wars  were,  of  course,  still  fought,  but 
they  were  not  daily  occurrences.  Sometimes  the  vil- 
lagers had  peace  because  none  sought  their  lands. 
Sometimes  it  was  because  they  had  been  conquered 
and  their  conquerors  (and  exploiters)  protected  them 
against  outside  invaders.  Accordingly,  an  increasing 
amount  of  the  villagers'  time  was  available  for  eco- 
nomic pursuits. 

The  result  of  these  two  developments,  an  increas- 
ing population  and  greater  peace,  was  the  birth  of 
agriculture  in  the  narrow  sense.  Formerly  animal 
and  plant  cultivation  had  existed  side  by  side,  the 
former  man's  work,  the  latter  woman's.  Now,  giv- 
ing less  attention  to  war,  man  takes  over  both  occu- 
pations. The  villager,  we  may  now  call  him  the 
"peasant,"  not  only  herds  the  cattle  but  tills  the 
ground.  Though  women  may  aid  in  the  cultivation 
of  the  soil,  and  maidens  may  tend  small  flocks  of 
goats  and  sheep,  men  are  dominant  in  both. 

It  was  to  be  expected  that  when  in  the  same  hands, 
pasturing  and  tillage  would  be  combined,  not  left  as 
formerly  just  existing  side  by  side.  But  it  was  chiefly 
the  pressure  of  population,  the  need  for  feeding  more 
and  more  people  that  led  to  the  combination  of  the 
two,  nay,  even  compelled  men  to  combine  them.  The 
method  of  plant  cultivation  seen  in  the  stage  of  cul- 
tural nomadic  economy  had  really  led  to  the  exhaus- 


SETTLED  VILLAGE  ECONOMY  69 

tion  of  the  soil.  It  was  essentially  mining  rather 
than  careful  cultivation;  especially  was  this  the  case 
as  population  increased.  The  discovery  was  made 
that  by  combining  in  a  vital  way  animal  and  plant 
cultivation,  it  was  possible  to  get  larger  returns  from 
each  and  still  retain  the  fertility  of  the  soil.  This 
is  sometimes  regarded  as  true  agriculture. 

Cattle  were   taken   from   the   herd  and  made   to  Animals 
trample  down  the  weeds,  as  is  the  case  in  Madagascar  cuitiva- 
even  to-day,  or  to  trample  in  the  seed  as  in  ancient  tion 
Egypt,  and  later  to  drag  the  plow.    The  ox,  the  buf- 
falo, the  camel,  and  later  the  horse,  were  taught  not 
only  to  drag  the  plow  but  to  be  of  service  in  the 
harvest.    And  also,  after  the  crops  had  been  removed 
from  the  meadow  and  the  arable  fields,  the  animals 
were  turned  in  to  manure  the  ground.     Of  course, 
those  peoples  who  had  no  such  domestic  animals,  could 
not  make  much  progress  in  agriculture,  unless,  indeed, 
they  used  the  irrigated  system.63 

It  is  necessary  to  make  a  sharp  distinction  between 
two  radically  different  kinds  of  agriculture,  on  the  Tw° 
one  hand  the  irrigated,  such  as  we  find  in  ancient 
Egypt  and  Babylonia,  and  in  many  parts  of  the  world  *ure 
to-day,  and,  on  the  other  hand,  the  non-irrigated, 
which  is  the  normal.  Generally  speaking,  non-irri- 
gated lands  are  relatively  unfertile,  because  of  lack  of 
sufficient  moisture  and  fertilizing  elements.  Devices 
of  various  kinds  are  adopted  to  add  to  the  fertility 
of  the  soil  or  to  retain  such  as  already  exists.  One  of 
these  devices  we  have  already  noted,  allowing  the 
animals  to  pasture  on  the  land  after  the  crops  have 
been  removed.  Another  is  fallowing  or  resting  the 
land. 

Fallowing  was  provided  for  among  the  Greeks  and  Fallow- 
Romans  in  ancient  times,  and  among  the  Germans  and  ing  a 


70      INTRODUCTION  TO  ECONOMIC  HISTORY 


Two-  and 
three- 
field 
systems 


Arrested 
devel- 
opment 


War 
and  pos- 
session 


English  in  the  medieval  period.  In  the  latter  case,  it 
was  made  possible  by  a  peculiar  arrangement  of  the 
land,  whereby  the  whole  arable  portion  of  the  village 
was  divided  into  two  sections,  called  "fields,"  one 
devoted  to  crops  and  the  other  left  lying  fallow. 
Later  three  fields  were  used,  two  being  in  crops  and 
one  in  fallow,  so  that  only  one-third  of  the  land  in- 
stead of  one-half,  was  untilled  each  year.  This  was 
a  great  step  forward,  but  it  was  followed  by  many 
improvements  in  the  process  of  agricultural  change. 
While  the  historic  peoples  passed  through  the  first 
phase  of  village  economy  early  in  their  development, 
many  of  the  backward  peoples  of  to-day  have  entered 
the  phase  but  have  not  made  much  progress  in  it. 
These  backward  peoples,  notably  of  Africa  and 
America,  have  settled  down  as  free  men  in  free  vil- 
lages, but  they  have  not  learned  to  combine  plant 
with  animal  cultivation  in  any  vital  way,  not  at  any 
rate  without  the  aid  of  more  advanced  peoples. 

21.  SECOND  PHASE  OF  SETTLED  VILLAGE  ECON- 
OMY: THE  DEPENDENT  VILLAGE.  He  who  has  land 
has  war,  according  to  a  French  proverb.  The  col- 
lectors had  their  more  or  less  well-defined  hunting 
lands,  and  the  cultural  nomads  their  extensive  areas 
for  plant  and  animal  cultivation,  and  accordingly  they 
had  to  fight  to  maintain  their  possessions.  But  the 
settled  villagers  had  lands  of  a  different  nature,  lands 
that  were  especially  adapted  and  specially  prepared 
for  the  use  to  which  they  were  put.  To  be  driven 
from  them  meant  to  begin  life  over  again,  while  the 
collector  or  nomad,  if  dispossessed,  might  simply  shift 
his  area  of  operation.  Therefore  the  villager  was 
anxious  above  all  to  maintain  possession  of  his  fields, 
even  his  stock  and  household  effects  taking  second 
place  in  his  esteem. 


SETTLED  VILLAGE  ECONOMY 


Since  villages  were  located  here  and  there  accord- 
ing as  fertililty  or  other  advantage  appeared  attrac- 
tive, they  were  often  far  apart.  This  meant  that  it 
was  difficult  for  one  village  to  co-operate  with  another 
in  war  or  peace.  For  this  reason  they  were  easily 
conquered.  It  is  not  surprising  that  Mohammed 
should  have  regarded  this  stage  as  one  of  degrada- 
tion :  wherever  the  plow  has  gone,  he  is  reported  to 
have  said,  servitude  and  shame  have  followed. 

The  conquest  that  the  peasant  feared  sometimes 
ended  in  slaughter,  as  in  the  case  of  the  Anglo-Saxon 
conquest  of  the  Britons  (A.D.  449-613).  It  might 
result  in  enslavement  as  frequently  happened  in  the 
ancient  period.  In  Central  Africa  to-day  the  Bahima 
people  have  conquered  and  enslaved  the  Bahero  vil- 
lagers. The  former  were  nomads,  the  latter  settled 
cultivators.  The  Baheros  were  forced  to  till  the 
ground,  and  to  build  huts  and  carry  water  for  their 
conquerors.64  Frequently  the  conquered  peasants 
were  left  in  possession  of  their  lands,  simply  being 
compelled  to  perform  certain  services  for  their  con- 
querors. This  is  illustrated  by  the  Helots  of  Sparta, 
by  the  subject  peoples  of  the  Turkish  Empire,  and  by 
some  peoples  of  our  own  time  living  in  Central  Africa. 
In  the  last-named  instance,  at  least  four  peoples  were 
conquered  by  the  Nubians  in  the  I9th  century.  Some 
were  sold  into  slavery,  but  others,  occupying  their 
own  lands,  were  simply  forced  to  serve  their  masters 
as  bearers  when  the  latter  went  on  an  ivory  hunt.65 

But  the  people  living  in  village  economy  were  made 
subject  to  others,  not  only  when  conquered  but  when 
trying  to  avoid  conquest.  Our  most  specific  informa- 
tion on  this  subject  comes  from  medieval  and  modern 
European  history.  No  sooner  had  a  people  settled 
than  there  appeared  some  wandering  tribes  in  search 


Villages 
open  to 
easy 
conquest 


Defen- 
sive 

measures 
lead    to 
aristoc- 
racy 


72      INTRODUCTION  TO  ECONOMIC  HISTORY 


Early  8th 
century 

9th    to 

nth 

century 


Commen- 
dation 

Of 
persons 


Of  lands 


of  their  lands,  their  houses,  and  their  goods.  The 
settled  Gauls  had  to  contend  with  the  Germans;  the 
Germans,  after  settling,  with  the  Slavs  or  Russians; 
and  the  Slavs,  when  they  settled,  had  to  defend  them- 
selves against  the  Tartars.  When  the  Moors,  com- 
ing from  North  Africa,  invaded  and  conquered  Spain, 
they  contented  themselves  largely  with  the  overlord- 
ship  of  the  native  villages,  except  in  the  south,  where 
they  completely  displaced  the  natives.  In  England, 
the  Danes  plundered,  conquered,  and  finally  located 
among  several  of  the  Anglo-Saxon  tribes.  Those  who 
had  settled  down  in  permanent  villages,  seeking  pro- 
tection from  the  attacks  of  those  who  were  still  in 
the  nomadic  stage,  took  such  measures  of  defense 
as  gradually  led  to  a  more  or  less  complete  subjection 
of  their  free  population  to  a  feudal  aristocracy. 

The  poor  and  defenseless  of  the  village  often  com- 
mended themselves  to  some  man  of  strength,  it  might 
be  a  redoubtable  warrior,  a  village  elder,  a  tribal 
chief,  or  a  man  with  a  large  fortified  private  estate. 
The  weak  man  promised  to  serve  the  strong,  and  the 
latter  offered  protection  and  sustenance.60  In  such  a 
way  there  grew  up  tribal  bands  of  warriors  ;67  doubt- 
less many  of  these,  as  time  went  on,  were  the  younger 
sons  not  provided  with  sufficient  land  to  enable  them 
to  live  as  cultivators.  The  subjection  of  one  man  to 
another  was  not  nearly  so  important  when  purely 
personal  as  when  it  involved  his  lands.  When  men 
commended  their  lands08  as  well  as  themselves,69  to 
a  patron  or  a  lord,  receiving  them  back  as  a  special 
bequest  in  return  for  protection,  another  step  was 
taken  in  the  direction  of  the  subordination  of  the 
village  of  free  men.  But  if  men  sold  their  birthright 
of  freedom,  they  received  something  substantial  in 
return.  When  hard  pressed  they  could  flee  to  their 


SETTLED  VILLAGE  ECONOMY  73 

lord's  castle  or  palisaded  house  with  their  household 
goods,  flocks,  and  herds;  and  in  time  of  famine  they 
would  receive  back  some  of  the  corn  which  they  had 
given  each  year  to  their  lord.70 

This  interchange  of  services  involved  in  the  more  Lord 
or  less  free-will  commendation  was  followed  by  ex-  e*P'olts 

...  ,-     ,  ..,,.•'.          villagers 

ploitation  on  the  part  or  the  patron,  in  itself  causing 
great  grief  among  the  poor  but  ultimately  proving  a 
blessing  to  them.  The  patron,  rich  and  influential  in 
the  tribal  or  incipient  national  court,  sought  the  right 
of  administering  justice  and  keeping  order  in  the  vil- 
lages of  his  district.71  Having  secured  this  right,  he 
appointed  an  official  as  his  agent  in  the  village,  and  Village 
set  up  a  court.  Here  he  made  a  beginning  in  the 
rational  settlement  of  disputes  and  quarrels.  It  is 
true  he  charged  a  fee — sold  justice,  if  you  will — but 
the  result  was  much  better  than  the  previous  feud, 
or  personal  and  family  revenge,  which  often  led  to 
unending  quarrels  and  frequent  homicides.  Attend- 
ance upon  this  court  was  doubtless  a  burden  and  sub- 
mission to  its  decisions  often  irksome,  still  the  village 
court  of  the  lord  became  the  nursery  for  the  discus- 
sion of  local  affairs  and  a  court  of  record  as  well  as 
a  recognized  hall  of  justice. 

The  price  that  the  lord  paid  for  public  assent  to 
his  village  jurisdiction  was  his  obligation  to  serve  the  Fe.Ufl- 
state,  chiefly  in  time  of  war.  The  lord  received  an 
income  from  the  courts,  and  in  return  provided  troops 
to  defend  not  only  the  villages  but  the  state  itself. 
When  fully  developed,  this  is  feudalism,  an  institution 
found  in  many  lands  and  at  different  periods.  Per- 
haps, if  the  relationship  between  the  village  and  the 
lord  had  ended  with  this  compulsory  system  of  justice, 
the  feudal  system  would  not  have  become  so  hateful 
to  the  villagers.  Gradually,  however,  through  the 


74      INTRODUCTION  TO  ECONOMIC  HISTORY 

agency  of  his  representative  and  by  means  of  his  legal 
position,  he  encroached  upon  the  rights,  time,  and 
persons  of  the  villagers  till  the  situation  became  intol- 
erable and  "peasant  revolts"  occurred  wherever  there 
was  an  opportunity  of  amelioration. 

Lord's  When  the  lord  set  aside  some  of  the  village  lands 

demesne     ag  jj|s  own>72  fa  drove  a  little  deeper  the  entering 

wedge  of  exploitation.  His  representative,  the  bail- 
iff, not  only  held  court,  but  supervised  the  cultivation 
of  the  lord's  own  lands  (demesne)  while  the  villagers 
did  the  work.  This  labor  was  of  two  kinds,  the  work 
of  so  many  days  (from  one  to  five)  each  week 
throughout  the  year,  and  special  assistance  in  plowing 
and  harvesting.  Additional  services  might  be  imposed 
when  times  were  favorable  to  the  lord,  such  as  the 
obligation  to  cart  wine  for  his  cellars,  grindstones 
for  his  mill,  and  corn  to  fill  his  granaries.  When  fully 
developed,  this  institution  is  called  the  "manor."  73 
This  manor  is  a  village  community74  possessed  by  a 

Manor  lord,  on  whose  own  holdings  of  land  the  villagers 
labor  under  the  supervision  of  the  lord's  bailiff. 
While  we  call  the  aristocratic  administrative  system 
of  lords  serving  the  state  in  war  and  peace,  "feudal- 
ism," we  call  the  economic  system  which  constituted 
the  support  of  feudalism,  "manorialism."  The  manor 
provided  the  feudal  lord  with  material  resources,  so 
that  he  could  devote  himself  to  the  affairs  of  govern- 
ment and  war. 

It  seems  not  unlikely  that  the  exploitation  of  the 
villagers  by  means  of  forced  services  on  the  lord's 

Roman  own  holdings  was  suggested  by  the  private  estate,  or 
as  it  is  called  in  western  Europe,  the  "villa."  The 
villa  was  a  farm  or  estate,  probably  originally  exist- 
ing quite  apart  from  village  life,  located  here  or  there 
where  conditions  were  favorable.  We  really  know 


SETTLED  VILLAGE  ECONOMY  75 

little  about  these  villas,  except  in  a  general  way  that 
they  did  exist,  and  as  we  learn  from  their  ruins,  the 
villa  mansions  were  in  some  cases  luxurious  residences 
and  seats  of  considerable  culture.  The  land  of  the 
villa  was  worked  by  slaves,  or  freemen  (possibly 
younger  sons),  induced  to  leave  the  villages  by  offers 
of  larger  holdings  of  lands.  The  chief  official,  the 
villa  foreman,70  supervised  the  labor  of  the  estate. 
Gradually  by  the  process  of  standardization  the  two 
institutions,  villa  and  manor,  came  to  be  alike  in 
almost  every  respect. 

Such,  then,  is  the  subjection  of  the  village  of  free- 
men,  and  its  transmutation  into  a  manor  of  serfs,  of  vil- 
men  with  certain  rights  but  many  disabilities  such  as  - 
restriction  of  sale  of  holdings  and  limitation  of  move- 
ment. It  was  brought  about  by  personal  commenda- 
tion, commendation  of  lands,  and  exploitation  through 
grants  of  jurisdiction  secured  from  the  sovereign,  fol- 
lowed by  gradual  encroachment  worked  out  in  relation 
to  a  special  part  of  the  manor  on  which  the  villagers 
were  forced  to  work,  the  products  of  which  helped 
maintain  the  lord.  While  commendation  usually  con- 
cerned only  individuals,  the  grant  of  jurisdiction  in- 
volved whole  villages. 

The  effect  of  the  development  of  the  unfree  village,   E,ff"* 

•     t  /•   i       MI  of  the 

or  manor,  upon  the  agriculture  of  the  village  we  know   unfree 

little  or  nothing  about.     The  check  upon  the  sub-  village 
division  of  holdings  already  begun  would  be  strength-  culture 
ened  by  the  lord's  desire  to  keep  the  holdings  large 
enough  to  furnish   services  easily  reckoned   and  ex- 
acted.    If  a  small  holding  owing  two  days'  service  a 
week  had  been  divided  among  five  sons,  it  would  have 
been  difficult  and  expensive  to  enforce  the  services. 
It  seems  reasonable  also  to  expect  that  the  villagers 
were  compelled  to  be  more  efficient  in  cultivation, 


76      INTRODUCTION  TO  ECONOMIC  HISTORY 

when  they  were  obliged  to  give  one-third  or  one-half 
of  their  time  to  their  lord,  while  formerly  they  had 
had  only  their  own  fields  to  look  after.  In  the  stage 
of  the  manorial  village,  the  villager  had  to  work 
harder  and  to  better  effect. 

The  subjection  of  the  village  was  a  gradual  process. 
We  have  noted  four  steps.     In  the  first,  men  were 
Steps  in     personally  bound  to  serve  their  chiefs  in  tribal  bands, 
mation'of   They  were  free  men,  except  perhaps  that  they  could 
the  manor  not  give  up  the  service  once  undertaken  without  the 
chief's  consent.     The  Anglo-Saxons  were  probably  in 
this  condition  during  the  earliest  part  of  their  history; 
Anglo-       the  natives  of  the  Gold  Coast  have  not  yet  advanced 
about3'      much  beyond  it.    In  the  second  step,  men  were  bound 
450-750      to  their  chiefs  or  lords  through  a   system  of  land 
tenure,  rather  than  the  former  personal  obligation. 
In   all  probability  this   lagged  behind   the  personal 
subjection   only   a    few   generations   in  Anglo-Saxon 
history.     In  the  third  step,  whole  villages  were,  by 
royal  grants  or  highhanded  action,  subordinated  to 
lords  to  whom  rents  in  kind  and  services  in  war  were 
due.     Among  the  Anglo-Saxons  we  may  place  this 
roughly  in  the  period  800-1000.     In  the  fourth  step, 
the  village  was  provided  with  a  special  piece  of  land 
called  "the  lord's  own  land"   (demesne  or  domain) 
on  which  the  villagers  were  compelled  to  work  sys- 
tematically.    This  is  the  full-fledged  manor,  which 
we  find  in  England  about  1000-1450. 

We  may  best  illustrate  manorial  conditions  from 
An  English  history  because  England  possesses   a  great 

manor,       tax  ^st>  ca^ed  Domesday  Book,   from  which  many 
1086          facts  may  be  gathered.     One  particular  manor,  de- 
scribed in  Domesday,  contained  about  twelve  hundred 
acres.     On  it  there  were  36  villeins  or  serfs,  who, 
we  may  be  sure,  were  bound  to  the  soil,  the  descend- 


SETTLED  VILLAGE  ECONOMY 


77 


78      INTRODUCTION  TO  ECONOMIC  HISTORY 


Manorial 
growth 

Eastern 
Europe 


Ancient 
period 


ants  of  the  old  freemen  and  the  possessors  of  small 
family  holdings  not  divisible.  There  were  also  18 
lesser  villeins,  doubtless  descendants  of  younger  sons 
and  possessing  very  small  holdings.  At  the  bottom 
of  the  social  scale  were  10  slaves,  8  male  and  2  female. 
A  few  freemen  resided  on  this  manor,  four  of  them 
being  horsemen  riding  at  the  service  of  the  lord. 
The  full  maturity  of  the  manor  is  indicated  by  the 
fact  that  the  lord  had  one  part  of  the  manor  as  his 
own  farm  (demesne)  while  the  tenants  occupied  and 
cultivated  for  themselves  the  rest  of  the  land.  While 
the  lord  had  four  plows,  the  tenants  (villeins  and 
others)  had  over  ten  times  as  many.  The  various 
classes  of  tenants,  those  with  plows  and  those  with- 
out, not  only  worked  their  own  holdings  but  tilled 
the  lord's,  under  the  supervision  of  the  bailiff.  This 
manor  had  a  church  with  two  priests."  Nothing  is 
said  about  the  lord's  court,  so  common  to  the  mano- 
rial organization,  because  it  was  not  a  subject  of 
inquiry  in  Domesday  Book. 

The  four  steps  in  the  formation  of  such  a  manor 
were  taken  in  western  Europe  about  the  same  time 
as  in  England;  in  eastern  Europe  somewhat  later, 
the  manorial  development  falling  within  the  period 
1500-1700.  We  should  like  very  much  to  identify 
the  periods  of  similar  developments  in  the  history 
of  Egypt,  Babylonia,  Assyria,  Canaan,  Phoenicia, 
Greece,  Rome,  and,  of  course,  China.78  We  know 
that  very  early  in  their  history  the  villages  of  these 
countries  were  put  in  subjection,  but  we  do  not  know 
the  exact  nature  of  it;  much  less  the  separate  steps 
taken  at  different  times.  The  feudal  age  of  China  is 
dated  2300-22  B.C.;  that  of  Egypt  2500-1580  B.C. 
In  Athens,  well  before  500  B.C.,  the  peasantry  was 
being  subordinated  to  the  eupatrids  or  great  land- 


SETTLED  VILLAGE  ECONOMY  79 

holders.  Similar  conditions  are  found  in  the  Latin 
villages  at  about  the  same  time.  In  this  instance  it 
seems  that  something  was  evolved  very  much  like  the 
medieval  manor  with  its  demesne  (?  villa,  hortus), 
and  tenants'  holdings  (heredia).™  In  India  before 
the  Christian  era  the  granting  of  whole  villages  by  the 
king  was  a  frequent  occurrence,  and  suggests  the  sec- 
ond step  in  the  subjection  of  the  village.80  In  all  these 
cases  the  subjection  of  the  village  probably  came,  or 
at  least  began  before  the  development  of  town  econ- 
omy, though  not  before  the  rise  of  political  villages 
or  centers  called  "towns."  81 

Such  instances  as  these  compel  us  to  note  the  sim- 
ilarity of  institutional  development  in  different  parts 
of  the  world.  This  may  be  explained  on  the  ground 
that  like  causes  (the  defense  of  villages)  bring  forth 
like  results  (the  subjection  of  villages).  We  should  Genesis 
note  also  the  difference  between  genesis  and  history.  *"d 

j      history 

Historically  the  Latin  village  of  the  6th  century  B.C., 
was  obviously  older  than  the  French  village  of  the 
1 3th  century  A.D.,  but  genetically  they  may  have  been 
of  the  same  age  or  state  of  development.  This  can 
be  illustrated  in  another  way  by  saying  that  the  Middle 
Ages  were  economically  less  advanced  than  the  an- 
cient period. 

22.       GENERAL   CULTURAL   ATTAINMENTS   OF   THE 

SETTLED  VILLAGE  STAGE.     The  chief  occupation  of 
the  settled  village  was  animal  and  plant  cultivation.   General 
The  land  used  had  to  serve  for  all  time — that  is,  could  "tuTti 
not  be  entirely  abandoned  for  different  holdings.    Im- 
provements in  the  methods  of  cultivation  have  already 
been  considered. 

For  the  storage  of  goods  the  village  stage  meant 
much.     The  nomads  had  possessed  little  more  than   Storage 
what  they  could  take  with  them.    They  had  preserved 


80      INTRODUCTION  TO  ECONOMIC  HISTORY 

meat  chiefly  by  drying  and  smoking.  Grain  supplies 
had  been  hidden  and  later  utilized,  but  this  at  best  had 
been  precarious.  In  the  village  stage,  granaries  were 
regularly  and  sometimes  artistically  constructed,  either 
as  part  of  the  dwelling  or  separate  from  it  so  as  to 
obviate  some  of  the  risks  of  fire.  Now,  too,  the  flesh 
of  animals  could  be  pickled  in  brine  contained  in  casks 
too  heavy  for  the  nomad  to  take  with  him  on  his  jour- 
neyings.  This  made  profitable  the  slaughtering  of 
animals  in  the  autumn  when  pastures  were  failing  and 
when  it  was  necessary  to  limit  the  number  of  mouths 
that  were  to  consume  the  scant  supplies  of  fodder. 

The  settled  village  was  a  center  of  manufacture  as 
well  as  of  cultivation  and  storage.  As  in  the  earlier 
village  stages,  women  were  more  identified  with  the  making 
industries  Qf  c\ofa  ancj  clothing;  men  with  the  manufacture  of 
leather  shoes  and  metallic  wares.  Either  sex  might 
make  pottery.  Specialization  and  division  of  employ- 
ments were  extended  beyond  anything  known  before. 
In  the  village  of  northern  India,  for  example,  there 
are  not  only  agriculturists  but  carpenters,  black- 
smiths, potters,  astrologers,  and  exorcists.  These 
receive  doles  of  grain  and  other  supplies  from  the 
other  villagers  whom  they  serve,82  not  according  to  the 
work  performed  but  according  to  their  yearly  needs. 
We  might  expect  that  villagers  raising  their  own 
Village  foodstuffs,  and  making  their  own  houses,  clothing, 
and  utensils,  would  have  no  use  for  trade  with  other 
parts.  It  is  certainly  true  that  village  trade  was  slight 
in  amount  but  real  and  relatively  important  because 
of  the  commodities  dealt  in.  A  Central  African  vil- 
lage could  procure  salt,  so  vital  to  man  and  beast, 
only  from  a  distance.  In  medieval  England  pitch, 
tar,  spices,  millstones,  and  iron  had  to  be  brought 
from  afar.  The  trading  aptitude  of  the  nomad  was 


SETTLED  VILLAGE  ECONOMY  81 

somewhat  but  not  vigorously  maintained  by  the  ne- 
cessities of  the  relatively  isolated  existence  of  the  vil- 
lage. All  villages  provided  most  of  the  things  needed ; 
none  provided  all.  The  best-off  were  those  that  had 
a  large  surplus  to  exchange  for  outside  products. 
Many  writers  have  maintained  that  village  economy 
was  characterized  by  self-sufficiency,  that  the  village 
was  more  or  less  closed  against  the  outside  world. 
The  element  of  isolation  was  unquestionably  large, 
but  it  has  been  exaggerated.83 

It  is  probably  true  that  shortly  after  permanent 
settlement,  there  was  a  period  of  relatively  little 
trade.  But  gradually  a  new  type  of  commerce 
evolved,  the  exchange  of  goods  at  certain  times  and 
at  certain  definite  places.  Gods  were  invented  to 
protect  the  market  places,84  and  sacred  spots  were  set  Village 
aside  for  trading.85  When  the  villages  became  sub-  r 
ject  to  lords,  we  find  the  latter  receiving  grants  of 
market  rights,  doubtless  previously  possessed  by  the 
villagers.86  It  is  to  be  noted  that  at  these  early  mar- 
kets original  producer  ordinarily  met  original  pro- 
ducer, each  giving  product  for  product  without  the 
use  of  money  as  a  means  of  exchange.  The  com- 
modities might  be  grain  for  cattle,  one  kind  of  grain 
for  another,  or  manufactured  articles  for  raw  prod- 
ucts or  for  other  manufactured  wares.  In  Mada- 
gascar to-day  the  inhabitants  of  fishing  villages  carry 
their  fish  to  inland  villages  to  exchange  for  other 
goods;  or  they  sell  their  fish  at  home  to  those  bring- 
ing other  products  for  exchange. 

Thus  it  is  evident  that  village  economic  life  was  not 
so  simple  as  some  would  picture  it.     As  compared 
with  what  went  before,  it  was  complicated ;  only  when 
we  compare  it  with  later  conditions  does  it  appear   village 
simple.      Political     or    administrative     organization, 


82      INTRODUCTION  TO  ECONOMIC  HISTORY 

however,  was  less  complex.  The  head  of  each  of  the 
large  families  was  a  village  elder.  All  the  village 
elders  made  up  the  village  council.87  The  chief  of  the 
village  would  be  the  head  of  the  most  important 
family,  or  some  family  head  specially  chosen  for  his 
task.  In  the  second  phase  of  the  village,  the  tendency 
would  be  for  the  village  council  to  give  way  in  civil 
affairs  to  the  lord's  bailiff  and  the  lord's  courts.  Or- 
dinarily, we  would  not  find  the  village  government  a 
supreme  authority  but  only  a  local  political  organiza- 
tion existing  within  a  larger  tribal,  urban,  or  terri- 
torial state.  There  were  a  few  villages,  however, 
which  attained  political  importance  because  the  seats 
of  government,  in  which  the  sovereign  power  resided 
and  in  which  there  was  some  special  provision  for 
defense  and  worship.88 

From  the  very  first  there  were  slaves  in  the  vil- 
siaves  in  lage.89  Indeed,  slavery  took  on  a  new  lease  of  life 
villages  when  disagreeable  plant  cultivation  became  a  neces- 
sity. Even  the  American  Indians  living  in  villages 
had  slaves.90  The  negroes  of  the  Gold  Coast  who 
were  captured  in  such  numbers  and  sent  to  America 
as  slaves,  have  a  tradition  that  long  ago  they  had 
been  enslaved  by  red  men,  when  they  themselves  lived 
in  the  interior  of  Africa.  Escaping  from  this  slavery, 
they  stole  away  in  groups  of  two  or  three  to  the  coast 
where  they  set  up  free  villages,  only  to  fall  into  the 
hands  of  European  and  American  slave  dealers.  But 
these  same  negroes,  risking  so  much  for  freedom, 
had  slaves  of  their  own.91  War,  trade,  crime,  and 
gambling  were  the  chief  sources  of  slavery  in  the  Old 
After  World  up  to  the  general  emancipation,  which  took 
place  quite  early  in  western  Europe,  but  in  Russia 
only  in  i86i92  and  in  the  United  States  only  in  1863. 
Besides  these  classes,  freemen,  freedmen,  and 


1000 


SETTLED  VILLAGE  ECONOMY  83 

slaves,  there  were  nobles,  found  as  well  among  such  Ear'y 
far-off  peoples  as  the  Melanesians93  and  the  nearer  villages" 
Germans.  In  the  1st  century  of  the  Christian  era, 
there  were  noble  Germans,94  who  were  possibly  village 
elders  or  chiefs,  or  the  descendants  of  distinguished 
men.  And  as  we  have  seen,  in  the  second  phase  of 
village  economy,  there  arose  a  class  of  military  lead- 
ers, later  the  full-fledged  feudal  lords,  so  well  known 
in  English  history  as  dukes,  marquesses,  earls,  vis- 
counts, and  barons.  In  the  establishment  of  such  a 
landed  aristocracy  we  cannot  help  seeing  progress,  for 
while  a  few  men  devoted  most  of  their  time  to  war 
and  administration,  the  rank  and  file  were  left  to 
engage  in  economic  pursuits. 

Of  the  religious  observance  and  belief  of  the  village  Worship 
we  know  all  too  little.  At  the  beginning  of  village 
economy  the  patriarchal  head  of  the  family  conducted 
most  of  the  religious  rites.  And  it  is  not  unlikely  that 
on  occasion  the  head  of  the  chief  family  of  the  village 
occupied  a  position  somewhat  akin  to  that  of  the  later 
village,  or  parish,  priest.  Apparently  a  specialized 
priesthood  as  distinct  from  the  head  of  the  family 
on  the  one  hand  and  from  the  sorcerer,  exorcist,  or 
soothsayer  on  the  other,  arose  in  a  few  outstanding 
villages  where  there  were  temples  or  monasteries, 
and  later  spread  to  all  the  other  villages,  great  and 
small.  But  whether  this  spread  came  before  the  next 
stage — town  economy — is  difficult  to  determine,  as 
also  whether  the  village  church95  was  modeled  after 
the  temple,  the  family  worship  room,  or  the  medicine- 
man's hut.  Certainly  under  the  influence  of  a  great 
town  such  as  Catholic  Rome,  parish  priests  in  the  ^J*£j_d' 
Middle  Ages  were  installed  in  villages  in  western  tury  f. 
and  northern  Europe.  At  any  rate,  one  can  say  that 
in  the  village  stage,  though  not  necessarily  in  all  vil- 


84      INTRODUCTION  TO  ECONOMIC  HISTORY 

lages,  three  classes  came  to  be  sharply  distinguished, 
those  who  labored,  those  who  fought  (lord  and  re- 
tainers), and  those  who  prayed. 

In  religious  belief,  polytheism  may  be  identified 

Religion  with  the  settled  village,  though  we  may  perhaps  find 
a  tendency  towards  monotheism.  Such  a  tendency, 
very  strong  among  the  Jews  and  the  Hindus,  was  less 
strong  among  the  early  Egyptians,  Greeks,  Romans, 
and  Teutons.  Here  perhaps  we  may  see  a  limitation 
to  the  economic  interpretation  of  history,  or  attempt 
to  explain  the  development  of  general  culture  (includ- 
ing religion)  by  economic  considerations.  We  might 
like  to  identify  a  religious  with  an  economic  stage, 
animism  (demonism,  or  fetishism)  with  collectional 
economy,  polytheism  with  nomadic  economy,  and  mon- 
otheism with  village  economy,  but  the  facts  warrant 
no  such  sweeping  conclusions.  We  might  expect  that 
in  the  first  of  these  economic  stages  man  would  have 
a  special  regard  for  wild  animals,  in  the  second  for 
local  domesticated  animals,  and  in  the  third  for 
plants,96  but  although  there  is  an  element  of  truth  in 
this  correlation,  especially  in  the  first  stage,  there  is  no 
universal  validity.  Perhaps  the  safest  correlation  that 
can  be  made  concerning  religious  belief  in  the  village 
stage,  is  that  polytheism  was  the  dominant  but  declin- 
ing religion,  monotheism  the  weak  but  rising  faith. 

Art  Early  religion  was  emotional  and  not  to  be  divorced 

from  early  art.  The  music  of  the  village  stage  (as  of 
later  stages)  was  made  to  subserve  the  worship  of 
gods,  as  well  as  to  stimulate  martial  ardor  and  sexual 
passion.  The  literature  that  we  call  classic  takes  its 
beginning,  not  its  finished  form,  in  the  village  stage, 
for  example,  the  Iliad,  the  Odyssey,  the  Mahab- 
harata,  the  Ramayana,  Beowulf,  the  Niebelungen- 
Hed,  and  the  Chanson  de  Roland. 


SETTLED  VILLAGE  ECONOMY  85 

In  earlier  stages  when  migration  or  movement  was    Depend- 
frequent,  the  sick,  the  blind,  and  the  aged  fared  badly.    ™*sges 
They  might  even  be  killed  when  they  could  not  keep 
up  with  the  march.     But  in  the  village  stage  such 
persons  were  not  so  much  a  hindrance  to  life.    They 
could  fit  into  some  place  and  survive.     They  could 
often  perform  minor  duties   of  real  service   to  the 
village. 

We  have  already  noted  that  danger  lurked  in  the 
accumulations  of  filth  in  the  village.  Probably  the  Vermm 
villagers,  however,  were  never  so  conscious  of  the 
lack  of  sanitary  conditions  as  they  were  aware  of  the 
vermin  that  infested  them.  In  earlier  stages,  vermin 
had  been  largely  confined  to  the  clothing;  in  the 
settled  village  it  was  the  curse  of  the  dwelling  as  well. 
Sometimes  the  women  plastered  the  mud  floors  with 
special  preparations  to  keep  away  insects.  Among 
some  peoples  cattle  were  kept  on  the  lower  floor, 
while  men,  women,  and  children  lived  above  them. 
The  vermin  engendered  in  the  soil  could  rarely  get 
past  the  refuse  of  the  stable  to  trouble  them. 

It  would  be  difficult  for  a  modern  man  to  sum  up 
the  culture  of  the  village  stage,  without  pointing  to 
the  insignificance  of  the  individual  and  the  importance 

of  the  group.     Cultivation  was  carried  on  in  accord  fa,c.k?^ 
•  i        i         i      •  •  r      i  T         i  •  individ- 

with  the  decision  or  the  group.  In  the  previous  ualism 
stages  the  group  had  been  dominant,  too,  but  now  the 
individual  is  hemmed  in,  not  only  by  the  persons  of 
the  village  but  by  the  more  restricted  area  of  the 
community.  No  man  could  develop  any  initiative  in 
his  methods.  No  man  could  be  alone,  he  could  hardly 
have  a  secret.  The  village  was  his  world  and  rarely 
did  he  leave  it,  except  to  go  to  a  market  in  a  place 
near-by.  But  all  this  is  the  point  of  view  of  the  mod- 
ern. The  villager  had  no  thought  of  these  things. 


86      INTRODUCTION  TO  ECONOMIC  HISTORY 


Urban 
villages 


Urban 
villages 
in  ancient 
Egypt 


A  mono: 
the  early 
Jews 


He  was  born  to  the  village  which  was  the  "factory" 
where  he  worked,  the  "parish"  where  he  worshipped, 
the  "community  center"  where  he  played,  and  the 
court  in  which  he  served  as  witness  and  juryman. 
For  a  few  there  was  opportunity  elsewhere,  at  a 
royal  court,  in  some  lord's  military  array,  or  in  a 
monastery.  For  the  rank  and  file,  escape  was  possible 
only  when  the  town  came  into  being. 

23.  OUTSTANDING  COMMUNITIES:  URBAN  VIL- 
LAGES. A  few  villages,  relatively  few  in  fact,  devel- 
oped into  political  or  administrative  centers,  some- 
times called  "towns."  Such  towns  are  not  to  be  con- 
fused with  the  economic  towns,  and  are  not  to  be 
identified  with  town  economy.  They  were  essentially 
villages  but  with  the  households  and  retinues  of  chiefs 
added,  and  perhaps  military  camps  as  well.  They 
are  accordingly  to  be  regarded  as  exceptional  villages, 
in  no  sense  introducing  a  new  phase  of  general  vil- 
lage development. 

Doubtless  often  when  we  read  in  ancient  and  medi- 
eval history  of  inland  towns,  we  have  to  do  simply 
with  political  or  administrative  villages.  Ancient 
Egyptian  history  provides  us  with  probably  the  ear- 
liest illustration  of  urban  villages.  A  very  old  symbol 
in  Egyptian  writing  stands  for  a  vil- 
lage enclosed  by  a  wall.97  Origin- 
ally this  may  have  been  the  tribal 
center,  where  the  tribe,  or  some 
clans  composing  it,  met  for  religious 
observances  in  times  of  peace  and 
where  they  gathered  for  defense  in 
times  of  war. 

The  Old  Testament  supplies  us  with  a  great  deal  of 
information  about  the  urban  village.  The  Hebrews 
found  the  Canaanites  living  in  such  communities  and 


SETTLED  VILLAGE  ECONOMY  87 

gradually  followed  their  lead  till  every  Hebrew  had 
his  "city"  or  fortified  village.  Such  a  place  had  its 
fields  like  any  other  village,  but,  because  of  its  fortifi- 
cation, it  was  regarded  as  a  haven  of  refuge  for  all 
and  a  safe  fold  for  the  defenseless  children98  in  times 
of  danger.  The  urban  village,  or  "city,"  as  it  is 
termed  in  the  Bible,  had  its  surrounding  rural  villages 
which  looked  to  it  as  the  sole  means  of  safety  in  time 
of  war,  and  which  seemed  in  some  way  to  be  politically 
attached.  It  is  reasonably  certain  that  in  the  second 
millenium  B.C.,  the  Hebrew  people  were  becoming 
territorialized.  The  tribes  were  breaking  up,  and 
the  villages  were  being  differentiated  into  two  classes, 
the  numerous  unfortified  and  a  few  fortified  villages, 
so  that  we  read  in  passage  after  passage  of  a  "city 
and  its  villages." 

In  Greece,  the  "town"  or  "city"  was  in  earliest 
times  just  an  urban  village.  It  was  an  agricultural  Ancient 
community  that  was  marked  off  from  the  other  vil-  Greece 
lages  by  its  political  and  religious  functions.  The 
Arcadians,  a  backward  people  among  the  Greeks, 
lived  in  ordinary  villages  until  the  4th  century  B.C., 
when  they  began  to  develop  special  urban  centers.98 
But  in  other  parts  of  Greece,  even  in  the  time  of  the 
Iliad,  perhaps  1000  B.C.,  the  urban  village  was  not 
uncommon.  The  lame  hammer  god,  Hephaestus, 
fashioned  for  Achilles  a  shield  with  many  scenes. 
Two  fair  towns  were  shown;  in  one  there  was  an 
assembly  of  men  to  decide  the  blood-price  of  a  man 
slain;  in  the  other  there  was  a  siege.  Agricultural 
work  was  illustrated:  plowing,  harvesting,  gather- 
ing grapes,  pasturing  cattle  and  sheep.100  And  in 
Homer's  Odyssey,  perhaps  about  800  B.C.,  the  typical 
question  asked  of  a  stranger  was,  "Who  are  you?  Of 
what  people?  Where  is  your  town  and  kindred?"101 


INTRODUCTION  TO  ECONOMIC  HISTORY 


Among 


Csesar  (55  B.C.)   tells  us  of  the  village  communi- 
ties of  the  Gauls.     The  people   called  "Helvetii," 


Among 
the  Ger- 
mans 


the  Gauls  numbering  263,000  in  all,  had  about  400  villages  and 
12  towns  or  urban  villages.102  Later  the  Greek  geog- 
rapher Strabo  says  that  the  tribe  called  the  "Allo- 
broges"  dwelt  generally  in  villages,  but  the  most 
notable  of  them  lived  in  Vienne,  called  the  "metrop- 
olis," but  which  was  really  a  mere  village.103  The 
British  chief,  Cassivelaunus,  held  out  against  Caesar 
in  his  village  protected  by  felled  trees,  a  rampart, 
and  a  ditch,  a  place  "well  filled  with  men  and 
cattle."104 

Among  the  Teutonic  peoples  the  fortified  village 
as  a  special  place  of  refuge  was  coming  into  prom- 
inence. In  the  heroic  poem,  called  Beowulf,  com- 
posed between  500  and  1000,  we  read  of  the  "hoard- 
city  of  heroes,"  the  "fair  strong  city,"  and  the  "shel- 
tering city  of  men."  The  queen  had  dwelt  "under  the 
city  locks,"  and  the  chief  had  enjoyed  "city  treasures." 
In  short,  the  urban  village  was  a  "city"  only  in  the 
sense  that  it  was  a  fortified  place  where  warriors 
dwelt  and  where  their  women  and  treasures  were 
safe.105 

Such  urban  villages  we  find  to-day  among  peoples 
who  live  in  the  stage  of  village  economy.  Among  a 
West  African  negro  people  there  are  a  few  political 
villages,  the  seats  of  chiefs,  the  inhabitants  of  which 
are  dependent  upon  agriculture.106  And  among  a 
Bantu  people  of  South  Africa  we  find,  besides  the 
ordinary  villages,  a  capital  village,  a  little  larger  than 
the  others  and  built  for  the  chief  after  his  mar- 
riage.107 

When  the  tribes  living  in  settled  villages  were  con- 
solidated by  conquest  and  formed  into  states,  the 
former  tribal  or  political  village  probably  became  an 


West 
Africa 


SETTLED  VILLAGE  ECONOMY  89 

administrative  center,  the  seat  of  a  sub-chief  obeying 
a  central  authority  greater  than  himself.     Such  seems 
to  have  been  the  case  in  ancient  Egypt,108  as  well  as  England, 
in  the  Gold  Coast  of  our  day.     In  Anglo-Saxon  Eng-  449-*o66 
land,  we  find  many  such  administrative  villages,  called 
"boroughs."     They  were  fortified  and  contained  the 
administrative  machinery  of  the  district  or  county,109 
like  many  of  the  "cities"  of  present-day  China,  large 
villages  with  a  wall  and  government  bureaus.110    The 
boroughs  in  England  contained  houses  that  belonged 
to  adjoining  manors.      In   these   houses   dwelt  bur- 
gesses who  were  sometimes  "knights"  and  who  were   1086 
charged  with   the    duty   of   defending   the   borough, 
especially  in  repairing  the  borough  walls.111 

While  some  of  the  old  political  or  tribal  urban  vil- 
lages were  made  into  administrative  villages,  at  times 
it  was  the  rural  village  that  was  made  over  by  some 
ruler  into  an  administrative  center,  or  fortified  as  a 
military  outpost.  There  could  be  no  better  example 
of  this  than  the  creation  of  walled  towns  out  of  Ger-  Germany, 
man  villages.  The  king  of  the  Germans  was  hard  put  century" 
to  it  to  defend  his  eastern  frontiers  against  Slavs  and 
Hungarians.  He  adopted  the  device  of  fortifying 
some  of  the  villages,  henceforth  called  "towns."  One- 
third  of  the  produce  of  all  the  villages  was  to  be 
stored  in  these  "towns"  and  all  "courts  and  meetings 
and  celebrations"  were  to  be  held  there,  so  as  to 
accustom  the  people  to  go  to  them  in  time  of  peace 
as  they  should  do  in  time  of  war.112  Probably,  in  this 
instance,  we  have  a  typical  historical  development. 
The  need  for  the  defense  of  rural  villages  gave  rise 
to  urban  villages,  fortified  centers  with  rural  villages 
dependent  upon  them  for  defense,  administration, 
and  some  religious  and  social  life.  And  yet,  as  in 
the  case  of  these  eastern  German  towns,  the  urban 


90      INTRODUCTION  TO  ECONOMIC  HISTORY 

villages  were  small  in  population  and  remained  de- 
pendent upon  agriculture.  Called  "towns,"  they  were 
really  villages  in  an  economic  sense.113 

It  is  to  be  expected  that  such  urban  villages  would 

be  regarded  as  the  most  likely  places  for  markets, 

Markets     as  was  the  case  in  the  medieval  Anglo-Saxon  borough 

viUaees1     an<^  t^ie  mo(^ern  West  African  village.     It  was  even 

decreed  that  all  sales  (probably  chiefly  of  cattle)   in 

Anglo-Saxon  England  should  take  place  in  a  borough; 

but  this  was  soon  given  up,114  probably  because  many 

rural  villages  also  possessed  markets,  the  use  of  which 

was   extremely   convenient   for   the   people   near   at 

hand. 

So  far  we  have  thought  of  only  simple  villages. 
Village  Agglomerations  of  villages  have  been  common  in  the 
aggl.om-  stage  of  village  economy.  They  have  been  called 

crations 

"towns"  or  "cities,"  but  economically  they  were  only 
villages,  or  urban  villages,  as  here  designated.  Many 
of  the  great  cities  of  antiquity  (and  of  the  Far  East) 
were  originally  groups  of  villages  brought  together 
by  some  common  need,115  and  either  surrounded  by  a 
wall  or  protected  by  forts  or  castles.  Prominent 
among  these  were  Lagash  (in  Babylonia),  Babylon, 
Athens,  Sparta,  and  Rome.  In  Greece  sometimes  a 
small  group  of  villages  would  be  formed  into  a  com- 
plex village  so  restricted  in  area  that  the  group  could 
be  regarded  as  one  "town."  Such  was  the  case  in 
Tegea  and  Mantinea  (both  north  of  Sparta).116  On 
the  other  hand,  numerous  villages  occupying  a  fairly 
wide  area  were  sometimes  grouped  together.  In  At- 
tica, as  the  record  goes,  twelve  village  groups  were 
formed,  each  of  four,  five,  or  six  villages,  the  chief 
group  being  Athens  itself.  According  to  tradition 
this  was  the  work  of  Cecrops.  Later,  all  twelve 
groups  were  united  to  form  the  Athenian  state,  the 


SETTLED  VILLAGE  ECONOMY  91 

reputed  accomplishment  of  Theseus.117  Here  we  have 
in  outline  the  story  of  the  grouping  and  differentiation 
of  villages  to  form  the  "city  state"  of  antiquity.  The 
government  of  each  village  gave  way  (probably)  to 
the  government  of  the  larger  group  of  which  it  was 
a  member,  and  then  (certainly)  to  the  government 
of  the  dominant  group,  Athens.118  It  is  to  be  noted 
that  Athens  was  a  compound  group  while  Tegea  was 
a  simple  one ;  that  the  villages  were  in  different  places 
in  the  case  of  the  Athenian  state,  while  in  Tegea  they 
were  in  only  one. 

Rome  grew  gradually  out  of  Latin  villages.  About  Rome 
three  villages  joined  to  build  and  maintain  a  citadel 
on  the  Palatine  hill;  similarly  on  the  Esquiline  and 
Quirinal  hills.  Then  these  three  urban  village  groups 
united  to  found  a  larger  group  with  a  citadel  on  the 
Capitoline  hill,  and  all  were  surrounded  by  a  wall.119 
This  was  the  Rome  that  later  became  the  ruler  of 
Italy  and  the  mistress  of  the  Mediterranean  world. 

Such  urban  villages  were  truly  outstanding  com-  Relation 
munities.  In  government,  war,  worship,  and  social  jj,."1^5}11 
life,  in  all  or  some  of  these,  they  played  a  special  part,  villages 
To  them  the  rural  villages  sent  their  taxes  in  kind 
and  their  soldiers  for  battle.  From  them  the  rural 
villages  received  protection,  guidance  in  religion,  and 
news  of  distant  happenings.  It  is  a  bit  confusing  that 
such  communities  should  be  commonly  called  "towns" 
or  "cities,"  while  here  they  must  be  called  "vil- 
lages."120 But  since  the  distinctions  made  in  this  book 
are  economic,  we  must  call  any  community  a  village, 
that  performs  in  economic  life  only  village  functions, 
regardless  of  its  non-economic  activities.  A  commur 
nity  that  is  primarily  agricultural  and  has  no  special- 
ized traders  is  here  taken  to  be  a  village  even  though 
otherwise  it  may  be  sharply  differentiated  from  its 


92         INTRODUCTION  TO  ECONOMIC  HISTORY 

fellows.  In  due  time  these  urban  villages  became 
towns,121  but  only  when  village  economy  gave  way  to 
town  economy. 

24.     SUGGESTIONS  FOR  FURTHER  STUDY 

1.  What  are  the  advantages  and  what  the  disadvantages 
of  the  new  stage  of  settled  village  economy  over  the  one  dis- 
placed ? 

2.  What  is  the  point  in  using  the  word  "settled"  before 
the  phrase  "village  economy"  ? 

3.  What  factors  determined  the  form  of  the  village? 

4.  Do  you  find  common  ownership  in  village  economy  (a) 
in  movable  or  landed  property,  and   (b)   vested  in  the  village 
group,   as  used   to  be  believed,   or   in   the   undivided   family? 
On  this  subject  see  the  works  of  Maine,  Laveleye,  Fustel  de 
Coulanges,  Maitland,  and  Lewinski. 

5.  What  factors  determined  the  nature  of  cultivation  in  the 
village  ? 

6.  Why   is   it   better   to   speak   of   "unfree,"    rather   than 
"manorial,"  village? 

7.  For  an  interesting  account  of  an  English  village  in  the 
thirteenth  and   fourteenth   centuries,  see  A.   Jessopp's  Village 
Life  in  Norfolk  Six  Hundred  Years  Ago,  a  chapter  in  the  book 
entitled  The  Coming  of  the  Friars  (i2th  ed.,  1903). 

8.  A  general   description   and   explanation  of  the   English 
manor  are  to  be  found  in  the  first  three  chapters  of  E.  Lipson's 
Introduction  to  the  Economic  History  of  England,  The  Middle 
Ages   (1915). 

9.  Original  documents  for  the  study  of  the  English  manor 
are  translated  and  conveniently  presented  in  English  Economic 
History:    Select  Documents   (ed.  by  A.  E.  Bland,  Brown  and 
Tawney,  1914). 

10.  Which  probably  labored  the  harder  and  more  contin- 
uously, man  or  woman,  (a}  in  the  free  village  and  (b)  in  the 
unfree  village? 

11.  Did   villagers   have  the   unfree   village   imposed   upon 
them  or  did  they  develop  it  themselves? 


SETTLED  VILLAGE  ECONOMY  93 

12.  A  valuable  special  study  of  an  English  manor  together 
with  various  original  Latin  documents  is  to  be  found  in  F.  G. 
Davenport's   Economic   Development    of    a    Norfolk    Manor 
(1906). 

13.  For  a  scholarly  general  account  of  social  structure  and 
class    relationships    in   continental    European   villages,    see  C. 
Seignobos'  Feudal  Regime   (trans,  by  E.  W.  Dow,   1902,  68 
pages). 

14.  Enumerate  and  describe  the  social  classes  in  the  free 
village.     What  changes  were  involved  in  the  development  of 
the  unfree  village? 

15.  Much    illustrative    material    can    be    found    in    Social 
England  (ed.  by  H.  D.  Traill,  6  vols.,  1894-98),  for  example, 
vol.  II,  pp.  92-100. 

1 6.  For  village  life  in  Russia  see  the  interesting  description 
in  D.  M.  Wallace's  Russia  (1877,  1910). 

17.  Explain  why  the  North  American  Indians  were  found 
in  different  stages  of  economic  development  all  the  way  up  to 
settled  village  economy. 

1 8.  In  what  stage  did  the  Pilgrims  of  Plymouth  find  the 
neighboring  Indians?   See  W.  Bradford's  History  of  Plymouth 
Plantation,  1606-1646  (ed.  by  W.  G.  Davis,  1908),  pp.  99-100. 

19.  Is  the  economic  historian  justified  in  using  the  phrase 
"urban  village"  while  others  apply  the  term  "town"? 

20.  Which  was  more  favorable  to  marketing,  a  rural  or 
an  urban  village,  and  in  the  free  or  unfree  phase? 

21.  Does  not  the  development  of  the  urban  villages  illus- 
trate a  happening  without  a  direct  economic  cause?     Is  it  not 
an  exception  to  the  economic  interpretation  of  history? 

22.  Describe   the   events   of   a   day   in   an   unfree   village. 
Scene:  the  end  of  the  harvest — women  preserving — some  men 
thatching   roofs,  others  preparing  for  autumn   festivities — the 
lord's  bailiff  trying  to  make  up  his  yearly  account — the  parish 
priest  there  to  act  as  scribe — a  villein  about  to  leave  with  a 
packload  of  wheat  to  make  up  the  deficiency  on  another  manor 
belonging  to  the  same  lord — the  miller  exchanging  grist  flour 
for   sheep — a  messenger    (freeman)    from   the  central   manor 
announcing  the  imminent  arrival  of  the  lord  with  his  servants 


94         INTRODUCTION  TO  ECONOMIC  HISTORY 

and  dogs  and  his  gentleman  followers — the  village  in  an  up- 
roar. 

23.  Describe  a  day  in  a  free  village. 

24.  Compare  the  village  communities  of  sectaries    (Rap- 
pists,  Mennonites,  etc.)  in  America  with  the  village  of  settled 
village  economy.    See,  for  example,  C.  NordhofFs  Communistic 
Societies  of  the  United  States  (1875),  pp.  63-95. 

25.  Contrast  an  American  "village"  of  to-day  with  a  village 
under  settled  village  economy. 

26.  Is  the   industrial   village  of   New   England   a  village 
under  settled  village  economy?     How  about  a  mining  or  fishing 
village  ? 

27.  Did  the  villager  lead  as  joyous  a  life  as  the  cultural 
nomad  ? 

For  further  study  consult  the  references  in  the  notes  that 
follow. 

25.    NOTES  TO  CHAPTER  III 

1.  A  good  illustration  of  this  is  to  be  found  among  the 
Huron  Indians  of  Canada  in   1639.     The  Hurons  cultivated 
the  land  for  about  ten  years  and  then  moved  their  village  to 
another  place.     F.   du   Peron   in  Jesuit  Relations ,   vol.   XV, 

P.  153. 

2.  Because  of  the  fact  that  the  word  "village"  is  often  applied 
to  a  temporary  abode  of  collectors  in  America  (see,  for  example, 
History  of  the  Expedition  of  Lewis  and  Clark  1804-5-6,  ed.  by 
J.  K.  Hosmer,  vol.  I,  pp.  122-123,  et  passim),  it  is  necessary  to 
add  the  word  "settled"   to  the  phrase  "village  economy"   so 
commonly   and   readily  understood   in   the   Old   World   as  a 
settled  community,  but  not  so  understood  in  the  New  World. 
Among  the  Eskimos  we  find  villages  called  "permanent,"  but 
they  are  permanent  only  because  there  is  no  reason  to  move, 
not  because  they  find  moving  difficult.     While  they  are  perma- 
nent in  location,  they  are  not  continuously  occupied  throughout 
the  year.     See  J.  Murdock,  Ethnological  Results  of  the  Point 
Barrow  Expedition.     Annual  Report  of  the  Bureau   of  Eth- 
nology  (1887-88),  pp.  44-48. 

Few  important  peoples  of  history  can  be  studied  when  they 
were  in  the  stage  of  settled  village  economy  because  when  their 


SETTLED  VILLAGE  ECONOMY  95 

history  begins  they  have  reached  the  town  stage.  Of  course, 
the  village  survived  village  economy.  In  town  economy  the 
village  was  reduced  to  dependence  upon  the  town.  It  is  this 
dependent  village  that  we  can  study  in  its  historical  aspect, 
especially  in  western  Europe.  To-day  there  are  many  peoples 
in  out-of-the-way  parts  of  the  world,  in  valleys  and  away 
from  trade  routes,  where  there  are  no  towns,  who  live  in  the 
settled  village  stage,  in  Asia,  Africa,  Oceania,  and  America. 
A  good  instance,  convenient  for  study,  is  Algeria,  where  the 
Chawia  and  Kabyle  peoples  have  long  been  settled  and  where 
the  Arabs  are  now  settling  down.  But  even  in  Algeria,  village 
economy  does  not  universally  prevail. 

It  can  hardly  be  too  emphatically  urged  that  we  are  not 
necessarily  studying  village  economy  when  we  are  studying 
a  village.  Nevertheless,  because  of  the  fact  that  the  early 
village  was  not  much  influenced  structurally  by  the  town,  we 
are  justified  in  using  information  about  villages  even  when 
they  are  dependent  on  a  near-by  town. 

3.  B.  H.  Baden-Powell,    The  Indian   Village  Community 
(1896),  p.  74  n.,  p.  75  n.;  C.  G.  and  B.  Z.  Seligmann,  The 
Melanesians  of  British  New  Guinea  (1910),  p.  199. 

4.  See,  however,  E.  Lipson's  Introduction  to  the  Economic 
History  of  England,  The  Middle  Ages  (1915),  p.  22,  n.  I. 

5.  Migration  and  travel  are  common  to-day,  but  families 
and  individuals,  not  large  groups,  are  generally  the  units  of 
movement  and  they  move  not  continuously  or  seasonally  but 
occasionally  with  the  expectation  of  finally  settling  permanently. 

6.  A.  Bernard  and  N.  Lacroix,  L'Evolution  du  Nomadisme 
en  Algcrie  (1906),  p.  250. 

7.  Tacitus,   Gerrnama,  chap.   16    (Select  Charters,  ed.  by 
W.    Stubbs,    1905,   p.    58).     The   interpretation   here   placed 
upon  the  passage  in  Tacitus  is  not  the  usual  one,  but  is  more 
probable. 

8.  Haufendbrfer,  or  heap-villages.     A.  Meitzen,  Siedelung 
und  Agrarwesen  (1895),  v°l-  I)  P-  47- 

9.  Rundling.    Cf.  Rundreihenlagerung. 

10.  C.    G.    and    B.    Z.    Seligmann,    The    Melanesians    of 
British  New  Guinea  (1910),  pp.  740-741. 


g6         INTRODUCTION  TO  ECONOMIC  HISTORY 

11.  A.  L.  Cureau,  Savage  Man  in  Central  Africa  (1915), 
p.  206. 

12.  A.  H.  Smith,  Village  Life  in  China  (1899),  P-  21. 

13.  C.  G.  and  B.  Z.  Seligmann,  The  Melanesians  of  British 
New  Guinea  (1910),  pp.  740-741. 

14.  Among  the  aborigines  of  India,   the  Dravidians,  the 
word    "village"    is   synonymous   with    fort.      B.    H.    Baden- 
Powell,  The  Indian  Village  Community  (1886),  p.  75  n. 

15.  G.  L.  Gomme,  The  Village  Community  (1890),  p.  12 
(describing  the  villages  of  the  Basutos  of  South  Africa).     Cf. 
also  Madagascar  villages  of  to-day. 

1 6.  A.  Lessauer,  "The  Kabyles  of  North  Africa,"  in  An- 
nual Report  of  the  Smithsonian  Institution  (1911),  p.  530. 

17.  D.   Randall-Maclver  and   A.  Wilkin,   Lybian  Notes 
(1901),  pp.  24-25,  44. 

1 8.  B.  H.  Baden-Powell,  The  Indian  Village  Community 
(1896),  p.  67.      Cf.  The  Laws  of  Manu  (trans,  by  G.  Biihler, 
1886),  p.  140. 

19.  A.  H.  Smith,  Village  Life  in  China  (1899),  P-  29. 

20.  See  H.  H.  Bancroft,  Works,  The  Native  Races,  vol. 
I   (1886),  pp.  533-535- 

21.  Cf.  A.   Meitzen,  Siedelung  und  Agrarwesen    (1895), 
vol.  I,  pp.  49-50. 

22.  Strassendorf.     Cf.  L'dngsreihenlagerung. 

23.  B.  H.  Baden-Powell,   The  Indian  Village  Community 
(1896),  pp.  70-71. 

24.  G.  Schweinfurt,  The  Heart  of  Africa  (1878),  vol.  I, 
p.  122. 

25.  D.  B.  Simmons  and  J.  H.  Wigmore,  Notes  on  Land 
Tenure  and  Local  Institutions  in  Old  Japan,  in  The  Asiatic 
Society  of  Japan,  vol.  XIX   (1891),  p.  92. 

26.  C.  G.  and  B.  Z.  Seligmann,  The  Melcnesians  of  British 
New  Guinea  (1910),  p.  423. 

27.  B.  H.  Baden-Powell,   The  Indian  Village  Community 
(1896),  p.  68.     Cf.  the  Japanese  demura  or  sub-village. 

28.  J.   G.   Frazer,    Totemism  and  Exogamy    (1910),   vol. 
II,  p.  550. 

29.  A.   Meitzen,  Siedelung  und  Agrarwesen    (1895),  v°l- 


97 

T,  pp.  47-54,  516-517;  vol.  II,  pp.  77  f.|  map  at  beginning  of 
vol.  Atlas  zu  Band  III,  et  passim.  Cf.  H.  L.  Gray,  English 
Field  Systems  (1915),  chap.  X. 

30.  Compare  the  views  of  Seebohm,  Vinogradoff,  Knapp, 
and  Wittich.    J.  R.  Mucke  (Urgeschichte  des  Ackerbaues  und 
der  Viehzucht,  1898,  p.  109)  identifies  the  Rundreihenlagerung 
with    the    highland    and    the    Ldngsreihenlagerung    with    the 
plain. 

31.  G.  Schweinfurt,  The  Heart  of  Africa  (1878),  vol.  I, 
pp.  122-123. 

32.  Ibid.,  pp.  212,  283. 

33.  B.  H.  Baden-Powell,  The  Indian  Village  Community 
(1896),  pp.  65-66. 

34.  It  happens  that  the  nucleated  village,  once  established, 
sometimes  maintained  itself  in  spite  of  the  fact  that  the  original 
need  for  defense  had  passed  away,  in  spite  of  some  exhaustion 
of  the  soil,  and  in  spite  of  the  lack  of  public  works  of  the  kind 
mentioned.     This  is  illustrated  by  the  English  nucleated  vil- 
lage, the  history  of  which  covers  over  a  thousand  years,  from 
its  foundation  down  to  the  present.     The  explanation  of  such 
a  survival  is  to  be  found  in  the  fact  that  the  village  group 
gradually  evolved  such  an  elaborate  system  of  co-operation  and 
group  action  that  it  was  difficult  to  separate  the  individual 
holdings   and   homesteads.     And  when   the  village  became   a 
manor,  there  was  not  only  the  social  and  economic  bond  but 
the  administrative,  to  maintain  the  original  type  of  village. 

35.  The  Norwegians  who  settled  in  Iceland  in  the  ninth 
and  following  centuries  established  scattered  homesteads  rather 
than  villages.     This  was  made  necessary  by  the  topography  of 
the  country.     There  was  but  little  fertile  land,  chiefly  pasture- 
land,  and  that  was  to  be  found  in  relatively  small   patches. 
See  the  Story  of  Egil  Skallagrimsson    (ed.  by  W.  C.  Green, 
J893),  pp.  49  f.     Similarly  in  northern  Russia  in  the  Middle 
Ages,  the  land  was  so  swampy  and  wooded  that  only  here  and 
there  could  a  patch  be  found  large  enough  even  for  a  single 
homestead.     Hence  the  scattered  homesteads  or  tiny  hamlets 
of  two  or  three  homesteads.     V.  O.  Kluchevsky,  A  History  of 
Russia  (trans,  by  C.  J.  Hogarth,  1911),  vol.  I,  p.  216. 


98         INTRODUCTION  TO  ECONOMIC  HISTORY 

36.  The  village  of  Ouang-Mo-Khi  in  the  province  of  Fo- 
Kien  is   (or  was  in  1885)   made  up  of  scattered  homesteads. 
The  villagers,  though  members  of  a  large  undivided  family, 
lived  near  their  fields.     Part  of  the  land  lay  in  the  valley,  and 
part  on  the  hillside.    The  latter  required  enormous  labor  for 
irrigation  and  cultivation.     Obviously,  the  problem  is  to  sub- 
sist on  a  naturally  infertile  soil.     G.  E.  Simon,  La  Cite  Chinoise 
(1885),  PP.  237,  254,  257  f. 

37.  In  the   1 3th   and   following  centuries  several   hamlets 
were  grouped  together  to  form  a  manor,  or  a  manorial  hamlet 
group.     F.  Seebohm,  The  Tribal  System  in  Wales  (1904),  p.  7. 

38.  See  below,  p.  82. 

39.  Cf.  The  Laws  of  Manu  (trans,  by  G.  Biihler,  1886), 
p.  296. 

40.  T.  Frank,  An  Economic  History  of  Rome  (1920),  p. 
54.     Cf.  Varro  on  Farming   (trans,  by  Storr-Best,  1912),  p. 
136,   referring  to  the  wintering  of  sheep  in  Apulia  and  the 
summering  in  Samnium. 

41.  A.  Erman,  Life  in  Ancient  Egypt  (1894),  PP-  44O-441- 

42.  J.  Klein,  The  Mesta  (1920),  pp.  17-29. 

43.  "Sennhiitten"  and  "Alpenwirtschaft"  in  Meyers  Kon- 
versatio?is-Lexikon    (1908). 

44.  P.   B.  du  Chaillu,    The  Land  of  the  Midnight  Sun 
(1882),  vol.  I,  pp.  280-282,  287. 

45.  G.  L.   Gomme,    The   Village  Community    (1890),   p. 
145.     Based  on  the  Report  of  the  Crofter  Commission  (1884). 

46.  In  the  autumn  of   1919,  live  stock  were  taken   from 
drought-stricken  Montana  to  northern  Minnesota.     Measures 
were  contemplated  at  this  time  to  facilitate  such  transfer  in 
the  future. 

47.  Cf.   A.   L.    Cureau,   Savage   Man   in   Central  Africa 
(1915),  p.  206. 

48.  Strabo,  Geography   (Bohn's  Library,  1903),  vol.  I,  p. 
266. 

49.  Giraldus    Cambrensis,    The    Topography    of    Ireland 
(Bohn's  Library,  1863),  p.  124.     See  Rolls  Series  edition  by 
J.  F.  Dimock   (1867),  vol.  V,  p.  151. 

50.  Giraldus     Cambrensis,     The    Description     of     Wales 


SETTLED  VILLAGE  ECONOMY  99 

(Bohn's  Library,  1863),  p.  490.     Cf.  The  Honour  of  Denbigh 
(1334,  ed.  by  Sir  P.  Vinogradoff  and  F.  Morgan),  p.  XLVII. 

51.  L.  Carr,  "The  Mounds  of  the  Mississippi  Valley,"  in 
Annual  Report  of  the  Smithsonian  Institution   (1891),  p.  514. 

52.  Jesuit  Relations,  vol.  IV,  p.  195  (1627)  ;  vol.  XVIII, 
pp.    233-235     (1640);    vol.    XXI,    p.    119    (1640-41);    vol. 
XXIII,  p.  225  (1642). 

53.  Bressani   (1653),  in  Jesuit  Relations,  vol.  XXXVIII, 
P-  245. 

54.  Jesuit  Relations,  vol.  I,  p.  85  (1610)  ;  vol.  Ill,  p.  209 
(1616). 

55.  L.  Carr,  "The  Mounds  of  the  Mississippi  Valley,"  in 
Annual  Report  of  the  Smithsonian  Institution   (1891),  p.  516 
(1687). 

56.  Jesuit    Relations,   vol.    LX,    p.    165    (1675-77);    vol. 
LXV,  p.  75  (1699)  J  vol.  LXVII,  p.  163  (1723). 

57.  Gravier  in  Jesuit  Relations,  vol.  LXV,  p.  133  (1700)  ; 
L.  Carr,  "The  Mounds  of  the  Mississippi  Valley,"  in  Annual 
Report  of  the  Smithsonian  Institution    (1891),  p.  528    (l8th 
century). 

58.  A.  L.  Cureau,  Savage  Man  in  Central  Africa  (1915), 
p.  226. 

59.  J.  G.  Frazer,  Totemism  and  Exogamy  (1910),  vol.  II, 
P-  432. 

60.  Ibid.,  p.  533. 

61.  Ibid.,  pp.  549-550. 

62.  Considerable  information  on  China  has  been  supplied 
by  the  Rev.  Mr.  C.  R.  Carscallen,  Chentu,  China. 

63.  See  above,  chap.  Ill,  n.  36. 

64.  J.  G.  Frazer,  Totemism  and  Exogamy,  (1910),  vol.  II, 

P-  533- 

65.     G.  Schweinfurt,  The  Heart  of  Africa  (1878),  vol.  I, 

pp.  113-117- 

66.  Cf.  O.  J.  Thatcher  and  E.  H.  McNeal,  A  Source  Book 
for  Medieval  History   (1905),  pp.  343-344. 

67.  A  good  illustration  is  to  be  found  in  the  southern  part 
of   the  English   colony  of   the   G^ld   Coast   in   West   Africa. 
Five  or  six  villages  are  grouped  together  to  provide  companies 


ioo       INTRODUCTION  TO  ECONOMIC  HISTORY 

of  warriors,  each  company  being  under  a  captain.  Each  tribe 
has  a  chief  who  is  in  command  over  all  the  captains.  Over  all 
the  tribal  chiefs  is  the  head  chief  or  king.  A.  B.  Ellis,  The 
Tshi-S peaking  Peoples  of  the  Gold  Coast  of  West  Africa 
(1887),  pp.  273-280.  Cf.  the  comitatus  of  the  Germans. 

68.  Precarium,  patrocinium  fundorum  beneficium. 

69.  Patrocinium,  commendatio. 

70.  Of  course,  in  case  the  commendation  was  to  a  mon- 
astery or  other  ecclesiastical   establishment,   the   exchange   of 
services  might  be  different.     The  poor  man  would  receive  the 
intercession  of  the  clergy  for  his  soul  and  he  and  his  descend- 
ants would  forever  serve  the  clergy  in  return. 

71.  Grant  of  immunity,  or  sac  and  soc. 

72.  Home  farm,  inland,  demesne,  dominium.     Cf.  Sir  P. 
Vinogradoff,  The  Growth  of  the  Manor  (1905),  pp.  224-225. 

73.  Manor    means    house.     Other    terms    for    manor    are 
seigneurie  in  France,   Rittergut   in  Germany,    and   shoyen  in 
Japan. 

74.  In  Wales,  several  hamlets  were  made  into  a  village  or 
manorial  group. 

75.  For  the  description  of  an  ancient  plantation,  or  villa, 
near  Pompeii,  see  T.  Frank,  An  Economic  History  of  Rome 
(1920),  pp.  209-210. 

76.  Villicus,  or  bailiff. 

77.  A.  E.  Bland,  P.  A.  Brown,  and  R.  H.  Tawney,  Eng- 
lish Economic  History:  Select  Documents  (1914),  pp.  16-17. 

78.  Cf.  The  Sacred  Books  of  China,   The  Li  Ki    (trans, 
by  J.  Legge,  1885),  vol.  I,  pp.  209-212. 

79.  T.  Frank,  An  Economic  History  of  Rome  (1920),  pp. 
9-12. 

80.  E.  W.  Hopkins,  India,  Old  and  New  (1902),  p.  214. 

81.  See  below,  pp.  86-91. 

82.  W.  Crooke,  Natives  of  Northern  India  (1907),  p.  129. 

83.  For  a  list  of  markets  in  English  manorial  villages,  see 
the  First  Report  of  the  Royal  Commission  on  Market  Rights 
and  Tolls  (1889),  vol.  I,  pp.  63-88.     Cf.  pp.  33-37- 

84.  A.   B.   Ellis,    The   Tshi-Speaking  Peoples  of  the  Gold 
Coast  of  West  Africa  (1887),  p.  88. 


SETTLED  VILLAGE  ECONOMY  101 

85.  Among   medieval    villages   the   holy   cross   or   church 
yard. 

86.  See  the  loth-century  English  charters  in  First  Report 
of  the  Royal  Commission  on  Market  Rights  and  Tolls  (1889), 
vol.  I,  pp.  33-34-     Cf.  pp.  63-88. 

87.  Cf.   B.   H.   Baden-Powell,    The  Indian    Village  Com- 
munity  (1896),  pp.   16,   173-174,  441;  A.  H.  Smith,  Village 
Life  in  China   (1899),  pp.  227-231;  Y.  K.  Leong  and  L.  K. 
Tao,   Village  and  Town  Life  in  China   (1915),  p.  36.     The 
question  whether  there  were  village  officials  in  Anglo-Saxon 
England  is  still  unsolved. 

88.  See  the  following  section  on  Outstanding  Communi- 
ties:   Urban  Villages,  pp.  89-96. 

89.  See  above,  p.  62. 

90.  S.  H.  Stites,  Economics  of  the  Iroquois  (1905),  p.  41. 

91.  A.  B.  Ellis,   The   Tshi-S peaking  Peoples  of  the  Gold 
Coast  of  West  Africa  (1887),  pp.  331-332. 

92.  The  emancipation  of  1861  was  chiefly  of  serfs,  but  the 
household  serfs  in  Russia  had  been  virtually  slaves. 

93.  C.  G.  and  B.  Z.  Seligmann,  The  Melanesians  of  British 
New  Guinea  (1910),  pp.  456-457. 

94.  Tacitus,    "Germania,"    in    Works     (Bohn's    Library, 
1904),  chaps.  13,  14,  vol.  II,  pp.  303-305. 

95.  For  the  village  shrines  of  India,  see  H.  Whitehead, 
The  Village  Gods  of  South  India  (1916),  pp.  14  f. 

96.  J.  G.   Frazer,   Spirits   of  the  Corn  and   of  the   Wild 
(1912),  vol.  II,  pp.  35-37. 

97.  F.   L.   Griffith,   Beni  Hasan  Archaeological  Survey  of 
Egypt,  pt.  Ill  (1896),  p.  25,  and  plate  V. 

98.  Bible,  Numbers,  chap.  32;  16,  17. 

99.  W.  Fowler,  The  City  State  (1895),  P-  35- 

100.  The  Iliad  of   Homer,  bk.  XVIII    (trans,  by  Lang, 
Leaf,  and  Myers),  pp.  380-385. 

101.  Homer,  Odyssey  (trans,  of  G.  H.  Palmer,  1891),  p.  6. 

102.  Cassar,  Bellum  Gallicum,  bk.  I,  §5. 

103.  Strabo,   Geography    (Bohn's  Classical   Library),  vol. 
I,  p.  277. 

104.  Caesar,  Bellum   Gallicum,  bk.  V,   §21.     Cf.  J.   M. 


LIBRARY 
UNIVERSITY  Of  CALIFORNIA 


102       INTRODUCTION  TO  ECONOMIC  HISTORY 

Kemble,  The  Saxons  in  England  (1876),  vol.  II,  pp.  263-264. 
Cf.  The  Laws  of  Manu  (trans,  by  G.  Biihler,  1886),  p.  227. 

105.  Beowulf   (trans,  by  J.  M.  Garnett,  4th  ed.,  1900), 
lines  54,  522,  1731,  1927-1928,  3100. 

106.  A.  B.  Ellis,  The  Tshi-Speaking  Peoples  of  the  Gold 
Coast  of  West  Africa  (1887),  pp.  3,  4,  273. 

107.  H.  A.  Junod,   The  Life  of  a  South  African    Tribe 
(1913),  vol.  I,  p.  391. 

108.  J.  H.  Breasted,  A  History  of  the  Ancient  Egyptians 
(1908),  p.  33- 

109.  Sir  F.  Pollock  and  F.  W.  Maitland,  History  of  Eng- 
lish Law  (1899),  vol.  I,  pp.  636-637.     Perhaps  the  hundred- 
manor  was  an  urban  village  even  earlier  than  the  boroughs. 
See  the  thesis  of  Miss   E.   B.   Demarest    (Radcliffe  College, 
1913). 

no.     A.  H.  Smith,  Village  Life  in  China  (1899),  P-  15- 
in.     A.   Ballard,    The   Domesday   Boroughs    (1904),   pp. 
31-36. 

112.  O.  J.  Thatcher  and  E.  H.  McNeal,  A  Source  Book 
for  Medieval  History  (1905),  pp.  71-72. 

113.  Catherine  II  of  Russia  is  said  to  have  created  216  new 
towns  in  twenty-three  years,  in  many  cases  by  simply  having 
built  a  few  administrative  log  houses.    D.  M.  Wallace,  Russia 
(1877),  p.  171. 

114.  Ancient  Laws  and  Institutes  of  England   (ed.  by  B. 
Thorpe,  1840),  vol.  I,  pp.  159,  207,  218,  241. 

115.  R.  Pohlmann,  Die  Ubervolkerung  der  antiken  Gross- 
stadte  (1884),  pp.  3  f.     R.  Maunier,  L'Origine  et  la  Fonction 
Economique  des  Villes  (1910),  pp.  50  f. 

1 1 6.  W.  Fowler,  The  City  State  (1895),  p.  51. 

117.  Fustel  de  Coulanges.     The  Ancient  City    (trans,  by 
W.  Small,  1901),  pp.  171-172. 

118.  Thucydides,  History    (ed.  B.  Jowett,   1881),  vol.  I, 
p.  104. 

119.  Fustel  de  Coulanges.     The  Ancient  City  (1901),  pp. 
179-181  ;  W.  Fowler,  The  City  State  (1895),  pp.  54-55. 

1 20.  In  New  England,  village  communities  were  originally 
also  called  "towns"    (townships).     Thus,  we  see  that  words 


SETTLED  VILLAGE  ECONOMY  103 

do  not  constitute  safe  guides  in  the  history  of  towns  or  villages. 
Man's  vocabulary  is  more  limited  than  the  forms  of  his  social 
institutions.  Accordingly  one  word  is  made  to  apply  to  several 
kinds  of  similar  institutions.  In  economic  history  stock,  capital, 
company,  agriculture,  industry,  and  distribution  are  all  used 
in  two  or  more  senses. 

121.     Cf.  W.  Sombart,  Der  moderne  Kapitalismus  (1920), 
vol.  II  (i),  pp.  128-129. 


CHAPTER  IV 

TOWN  ECONOMY 
26.      THE  ECONOMIC  TOWN  AND  TOWN  ECONOMY. 

The  town  developed  out  of  the  village.  It  was  char- 
Town  acterized  by  a  growing  economic  ascendance  over 
a"^  near-by  villages.  We  have  already  seen  that  the 

urban  village  possessed  a  dominance  over  adjacent 
rural  villages,  that  was  political  (or  administrative), 
religious,  and  social.  We  are  now  concerned  with  a 
corresponding  development  in  the  economic  field, 
especially  in  trade. 

The  exchange  of  goods  has  taken  place  in  all  the 
earlier  stages  of  known  human  history.  It  is  an  ob- 
Trade  vious  means  of  getting  what  you  have  not,  in  return 
present  f°r  what  you  already  possess  in  quantities  beyond 
your  needs.  War  and  feuds  have  stopped  it  for  a  time 
or  made  it  precarious,  but  it  has  always  revived.  The 
climate  has  been  so  debilitating  as  to  make  possible 
the  production  of  very  little  surplus  for  exchange,  but 
some  one  from  a  more  energetic  district  enters  to 
point  out  what  can  be  done  and  even  to  direct  opera- 
tions, as  in  the  tropics  to-day  where  Englishmen  and 
others  are  developing  the  sluggish  economic  life  of 
the  natives. 

Exchange  in  the  collectional  and  nomadic  stages 
Trade  had  been  carried  on  at  various  favorable  spots  on  the 
settled  boundary  line  of  the  home  territory  of  each  people, 
village  In  the  village  stage  the  market  place  was  definitely 

104 


TOWN  ECONOMY  105 

located  in  one  spot  in  one  village  convenient  for 
neighboring  villages.  On  this  village  market,  peasant 
exchanged  product  with  peasant,  and  each  gave  of  his 
surplus  manufactures,  cloth,  leather,  utensils,  to  the 
other  in  return  for  part  of  his  surplus.  Trade  was 
direct.  Original  producer  exchanged  with  original 
producer.  There  were  no  specialized  middlemen. 

Each  village  was  the  peer  of  the  other  in  matters 
of  trade.     Indeed,  the  mere  location  of  a  market  in  Market 
the  village — it  had  to  be  in  some  village — gave  that  Vlllases 
community  no  pre-eminence  in  trade  at  first.     Hun- 
dreds of  villages  once  possessing  markets  are  villages 
and  insignificant  villages  to  this  day.     Some  Chinese 
villages  regard  the  influx  of  undesirables  attendant 
upon  markets  and  fairs  as  more  than  an  offset  to  the 
advantage  of  easy  access  to  a  market  place. 

But  when  there  came  into  being  a  class  of  traders 
who  resided  in  a  market  village,  and  who  had  stores  Birth  of 
which  not  only  supplemented  the  market  place  but  thetown 
became  its  rivals,  then  the  economic  town  was  born.1 
The  village   (rural  or  urban)2  had  become  a  town, 
and  village  economy  had  given  way  to  town  economy. 

When  the  specialized  trader  came  into  existence, 
located   in   a  market  village   and   trading  from  his   Special- 
house,  he  introduced  a  new  economic  organization  of  trader 
vast  importance,  town  economy.    Such  a  trader  might 
go  (sometimes  against  town  regulations)  to  the  near- 
by market  villages  to  buy  and  sell,  but  his  main  busi- 
ness was  to  concentrate  the  exchange  of  goods  in  his 
store  in  his  home  town.     He  might  go  out  upon  the 
market  place  or  to  the  merchant  hall  of  his  own  town 
to  buy  his  supplies  or  to  sell  his  goods,3  but  he  pre- 
ferred to  attract  seller  and  purchaser  to  his  humble 
place  of  business.     This  was  the  single  room  in  his   Store 
dwelling  where  he,  or  his  wife,  was  always  to  be 


io6    INTRODUCTION  TO  ECONOMIC  HISTORY 

found.  Here  he  had  stored  up  wares  of  many  kinds, 
where  they  could  be  divided  and  sold  to  customers 
in  any  quantities.  In  short,  this  trader  was  offering 
a  new  service  to  his  fellow  townsmen  and  to  the 
near-by  villagers:  he  was  always  ready  to  buy  and 
always  ready  to  sell.  He  (or  his  wife,  if  he  were 
absent)  was  in  his  store,  not  simply  from  sunrise  to 
noon,  or  any  other  restricted  period  such  as  prevailed 
on  the  market  place,  but  from  morning  till  night.  He 
was  in  his  store  to  do  business,  not  simply  one  or  two 
days  a  week  when  a  market  was  held  or  once  or  twice 
a  year  when  the  fair  was  under  way,  but  every  day 
except  the  holiday,  and  even  then,  we  may  suspect, 
he  could  be  found,  if  a  customer  wanted  him.  Per- 
haps we  can  visualize  this  by  an  analogous  situation 
of  our  own  day.  A  man  living  in  the  suburbs  of  a 
city  often  opens  a  room  of  his  house,  or  builds  an 
addition  to  his  house  reaching  to  the  sidewalk.  Here 
he  caters  to  the  trade  of  his  district.  He  keeps  a 
variety  of  wares,  opens  early,  closes  late,  and  even 
sells  goods  on  Sunday.  He  meets  a  real  need,  though 
no  such  far-reaching  results  follow  as  from  the  kin- 
dred actions  of  his  forerunner  in  the  early  town. 

In  many  towns  there  were  two  opposing  tendencies. 
Two  On  the  one  hand,  traders  preferred  to  sell  from  their 
tenden-  °wn  houses.  On  the  other  hand,  public  policy  and 
cics  some  advantages  in  buying  and  selling  led  to  concen- 

tration of  trade  in  one  building,  or  in  a  few  specialized 
places.  Such  are  the  bazaars  of  the  Orient  and  the 
halls  of  medieval  towns.  Ultimately,  in  the  second 
phase  of  the  town's  history,  the  two  tendencies  were 
somewhat  merged.  Stores  in  the  houses  of  the  mer- 
chants were  in  common  use,  but  the  stores  were  local- 
ized on  certain  streets. 

The  characteristic  of  the  town  was  trade.     If  the 


TOWN  ECONOMY  107 

trade  remained  local,  the  town  itself  remained  local  Location 
and  unimportant,  but  if  favorably  situated  for  ex- 
tended trade,  it  grew  rich  and  famous.  When  located 
on  a  river,  at  the  head  of  navigation  (Basel),  at  a 
good  landing  (London),  or  at  the  confluence  of  two 
rivers  (Coblenz),  the  town  was  likely  to  attain  some 
importance.  Such  were  the  great  river  towns  of 
ancient  history,  Ur,  Nippur,  and  Babylon;  Memphis 
and  Thebes.  A  town  situated  on  the  shore  of  a  lake 
or  a  sea,  and  having  a  good  riding  for  ships,  especially 
at  the  mouth  of  a  river,  had  obvious  advantages. 
Examples  are  to  be  seen  on  almost  every  map,  but 
Carthage,  Rome,  Lisbon,  and  Dantzig  are  of  prom- 
inence. The  special  position  of  such  towns  explains 
their  eminence.  Lesser  towns  enjoyed  only  the  dis- 
tinction of  being  central  for  the  adjacent  villages. 

An  economic  town  would  not  look  very  different 
from  a  market  village,  especially  an  urban  market   Appear- 
village.    And  certainly  in  the  transition  from  one  to   jl"^^ 
the  other,  differences  were  not  great.     But  the  condi- 
tions  that   made   the   economic   town   were    also   to 
develop  it  into  a  community  of  specialized  traders 
and  manufacturers  who  would  form  gilds  or  asso- 
ciations of  their  own,  seize  control  of  the  town  gov- 
ernment, and  in  the  most  successful  towns  build  ele- 
gant homes  and  splendid  churches. 

In  concentrating  on  the  town  we  must  not  forget 
the    district   dominated  by   it.      The   town   was    the   Area 
nucleus;  the  surrounding  territory,  with  a  radius  of   ar°unJ 

.,.,.,  ,  .  the  town 

ten  or  twenty  miles  in  which  were  located  a  score  or 
more  of  villages,  constituted  the  rest  of  the  economic 
cell.  From  the  standpoint  of  the  town,  the  villages 
were  its  customers  and  sources  of  supply.  From  the 
standpoint  of  the  villages,  the  town  was  the  center  to 
which  they  went  to  dispose  of  their  surplus  products 


io8    INTRODUCTION  TO  ECONOMIC  HISTORY 


ENGLISH   CHANNEL 


MAP  SHOWING  TOWNS  AND 
DEPENDENT  VILLAGES 

(A  Kction  of  Himpihire  in  Southern  England  it  Uw  time  ot 
Domenlay  Book.  1098) 

Manon 

O  Manor)  contribuUry  to  Winchester.  1080 
X  Later  Boroughs  (up  to  1306) 


TOWN  ECONOMY 


109 


and  to  add  to  their  supplies.  The  relationship  was, 
of  course,  not  only  one  of  mutual  dependence  but  one 
of  mutual  advantage.  If  the  district  was  fertile  and 
accessible,  the  town  nucleus  would  be  large  and  flour- 
ishing and  the  townsmen  rich  and  prosperous. 

We  must  not  think  of  the  town  economic  area  as 
closed  to  the  outer  world,  much  less  surrounded  by  a 
wall  or  fortification  of  any  kind.  The  villages  nearest 
to  the  town  would  be  most  dependent;  those  farthest 
away  would  trade  with  two  towns,  being  on  the  border 
of  two  town  economic  units.  Town  economy  is  an 
organization  of  consumers  and  producers  who  work 
out  their  dependence  on  one  another  and  on  the  out- 
side world  through  the  agency  of  a  town.  The  town 
sold  to  the  village  its  own  manufactures  (if  it  had 
any4)  such  as  fine  cloth  and  fine  shoes,  the  manufac- 
tures of  distant  lands  such  as  wines,  beads,  weapons, 
and  utensils,  and  the  raw  products  also  brought  from 
afar  such  as  spices  and  dried  fruits.  The  village  gave 
in  return  for  these  its  cereals,  meat,  and  hides,  and 
such  coarse  cloth,  cheese,  butter,  and  beer  as  were 
manufactured  beyond  its  needs.  Both  the  town  and 
the  village  had  raw  products  and  manufactured  goods 
for  sale. 

Town  economy  is  the  organization  of  many  vil- 
lages and  one  town,  so  as  to  constitute  a  single  eco- 
nomic unit.  The  town  was  the  center  of  local  trade 
and  the  center  to  which  were  brought  the  products 
from  other  districts  for  sale  to  the  people  of  the  town 
and  to  the  people  of  the  villages.  It  was  also  the 
center  to  which  the  villages  of  its  district  sent  such 
goods  as  were  suitable  for  export  to  other  districts, 
perhaps  even  to  foreign  lands.5 

It  can  hardly  be  too  strongly  emphasized  that  we 
are  here  dealing  with  purely  economic  considerations. 


Area 
around 
the  town 
not  closed 
to  the 
rest 
of  the 
world 


i  io    INTRODUCTION  TO  ECONOMIC  HISTORY 

Town        The  economic  town  might  also  constitute  a  politically 

aHjTcon-     independent  state6  (such  as  Pisa  in  the  early  Middle 

sidered      Ages)  or  might  be  but  one  part  of  a  state  dominated 

by  another  town  as  in  the  case  of  the  "city"  states 

of  antiquity  and  of  the  Middle  Ages   (such  as  Pisa 

1406          after  it  was  conquered  by  Florence).     Or,   as  was 

often  the  case,  it  might  lie  within  a  large  empire  or 

territorial    state,    constituting    an    insignificant,    yet 

vital,7  part  of  the  whole  national  or  imperial  group. 

27.      WHEN    TOWNS     DEVELOPED:     STRUGGLE     BE- 

Town  TWEEN  TOWN  AND  VILLAGE.  In  the  field  of  material 
aeainsrt9  culture,  the  town  stage  was  the  highest  that  most 
the  civilized  or  advanced  peoples  ever  attained.  It  was 

indeed  so  high  that  it  often  toppled  over  like  the  slen- 
der turret  of  a  temple  or  the  over-refined  steeple  of  a 
Gothic  church.  People  in  the  town  stage  were  con- 
stantly menaced  by  those  in  a  lower  stage,  either  by 
people  in  the  cultural  nomadic  stage  or  that  of  village 
Village  economy.  And  when  the  town  fell  the  village  took  its 
wins  place.  This  is  one  of  the  most  tragic,  as  well  as  one  of 
the  most  common,  occurrences  in  history.  It  is  clearly 
"retrogression  ever  dragging  evolution  in  the  mud." 
Town  economy  occupies  a  stage  in  human  history, 
not  a  period  of  time.  A  people  climb  the  great 
heights  of  the  town  stage  and  then  fall  down.  The 
process  begins  over  again,  sometimes  with  the  same 
result.  How  long  this  struggle  has  gone  on,  we  can- 
not say;  but  during  at  least  the  last  five  thousand 
years  of  recorded  history,  the  rhythmic  rise  and  fall 
of  towns  is  the  outstanding  event  in  the  history  of 
advanced  peoples.  It  is  not  a  matter  of  wonder  that 
this  was  the  case  because  written  history  was  a  town 
accomplishment,  and  the  science  of  history  writing 
Histori-  took  its  origin  in  the  town,8  the  home  of  peace,  orderly 
government,  wealth,  and  leisure. 


TOWN  ECONOMY 


in 


The  earliest  civilization,  of  which  we  have  any 
knowledge,  grew  up  in  Egypt,  all  the  cradles  of  which 
were  towns  on  the  River  Nile,  such  as  Memphis, 
Abydos,  and  Thebes.  Perhaps  the  civilization  on  the 
Euphrates  and  Tigris  Rivers  was  little,  if  any,  later 
than  that  of  the  Nile.  In  Nippur,  Ur  (the  home  of 
Abraham) ,  Akkad,  Lagash,  and  Babylon,  a  high  form 
of  culture  developed.  From  these  cities  the  Hebrews 
obtained  much  of  their  theology,  which  has  come 
down  to  us  directly  in  the  Bible.  The  earliest  codes 
of  laws  now  extant  come  from  Nippur  and  Babylon, 

In  Phoenicia,  Tyre  and  Sidon  (great  centers  of 
trade)  were  very  ancient  towns,  and  in  Crete  the 
highly  cultured  Cnossus.  In  Greece,  Mycene,  Tiryns, 
and  Argos  were  the  seats  of  town  civilization,  while 
Troy  was  prominent  in  Asia  Minor.  In  all  of  these 
instances,  with  the  possible  exception  of  Cnossus  in 
seagirt  Crete,  danger  from  without  was  a  constant 
menace.  How  early  and  how  often  these  towns  fell 
and  started  over  again9  as  villages  we  do  not  know. 
But  certain  it  is,  that  they  have  all  fallen,  and  some 
so  low  that  their  very  location  is  now  determined  with 
difficulty.  In  Greece,  when  migrations  of  the  non- 
town  peoples,  called  lonians,  ^Eolians,  and  Dorians, 
took  place,  town  civilization  gave  way  to  the  village 
stage.  In  due  time  the  newcomers  established  towns 
of  their  own.  In  place  of  the  old  centers,  Mycene, 
Tiryns,  and  Argos,  there  grew  up  the  new  towns, 
Athens,  Sparta,  and  Corinth,  with  a  culture  higher 
than  the  older  one. 

In  Italy,  possibly  contemporaneously  with  the  old 
Greek  cities,  Etruscan  towns,  notably  Veii,  attained 
considerable  development.  Latin  towns  such  as  Rome 
and  Greek  towns  such  as  Sybaris  and  Croton  gave 
color  to  a  later  period  in  the  history  of  Italy.  Great 


Egypt 


Baby- 
lonia 


Towns  of 
eastern 
Mediter- 
ranean 


Towns 
in  Italy 


ii2     INTRODUCTION  TO  ECONOMIC  HISTORY 

Rome  as  the  power  of  Rome  finally  became,  it  was  not  able 
to  withstand  the  attacks  of  non-town  peoples  wander- 
ing about  in  search  of  plunder  and  homes.  In  382 
B.C.,  the  Gauls  plundered  the  city  of  Rome,  but  with- 
out capturing  the  citadel.  In  A.D.  410  the  West 
Goths  and  in  A.D.  455  the  Vandals  seem  to  have 
gained  possession  of  the  entire  city.  Rome  itself  sur- 
vived, but  it  retrogressed  till  in  the  early  Middle 
Ages  it  was  insignificant  when  compared  with  its 
former  self,  and  many  Roman  provincial  towns  en- 
tirely disappeared.  In  their  places  came  a  new  gen- 
eration of  economic  centers,  Amalfi  flourishing  in 
the  nth  century,  Pisa  in  the  I2th  century,  Genoa  in 
the  1 3th,  and  Florence  and  Venice  in  the  I5th.  Flor- 
ence was  the  Athens  and  Venice  the  Corinth  of  reviv- 
ing Italian  civilization. 

In  France  the  old  towns  gave  way  when  the  Franks 

Gaul  (a  Germanic  people)  conquered  the  Gauls  (Kelts 
akin  to  the  Irish  and  Welsh).  The  ancient  towns  of 
Vienne,  Lyon,  Toulouse,  and  Bordeaux  were  left  in 
ruins  or  reduced  to  villages.  Later  they  revived,  but 
this  time  it  was  not  Lyon  but  the  new  town  Paris  that 
was  to  stand  out  among  its  neighbors. 

In  England  a  similar  development  took  place.    The 

Britain  old  British  towns  (perhaps  sixty  or  more  in  A.D. 
izo)10  much  improved  during  the  Roman  occupation, 
were  not  appreciated  by  the  Jutes,  Angles,  and  Saxons 
(Germanic  kinsmen  of  the  Franks),  who  thought  of 
no  higher  stage  than  village  economy  and  allowed 
the  old  towns  to  fall  into  ruins  (A.D.  449  to  about 
900).  A  few  of  them  rose  again  as  minor  towns, 
such  as  Chichester  and  St.  Albans;  others  regained 
or  surpassed  their  earlier  state,  such  as  London,  York, 
and  Winchester.  But  as  in  the  case  of  the  French 
towns,  the  new  places  owed  little  or  nothing  to  the 


TOWN  ECONOMY  113 

old  ones  except  their  location  and  a  few  building 
stones. 

The  story  of  centers  in  Germany  is  very  similar. 
The  old  Roman  provincial  towns  of  Cologne,  Mainz,  Germany 
and  Coblenz  revived  after  the  imperial  Roman  troops 
had  been  driven  out.  They  had  been  the  farthest 
outposts  of  Roman  town  culture  in  the  direction  of 
the  Germanic  area  of  village  economy.  But  other 
towns  of  later  growth  were  to  rival  or  surpass  them, 
such  as  Liibeck,  Hamburg,  Berlin,  and  many  others. 

In  economic  history  the  growth  of  towns,  their 
decay,  and  later  revival  constitute  a  cultural  cycle.  T0^11 
From  about  3000  to  1500  B.C.  the  "yEgean"  civiliza- 
tion of  Memphis,  Nippur,  Mycene,  and  Cnossus  was 
at  its  height.  Then  came  a  period  of  town  decay  and 
village  dominance,  about  1500  to  700  B.C.  the  earliest 
middle  ages  of  which  we  have  any  knowledge.  Fi- 
nally in  the  birth  of  Athens,  Thebes,  Corinth,  Syra- 
cuse, Carthage,  and  Rome,  the  modern  period,  about 
700  B.C.,  to  A.D.  500,  came  into  being,  the  modern 
period  of  Herodotus,  Thucydides,  and  Caesar.  To  us 
this  is,  of  course,  the  "ancient"  period.  And  after  it 
came  our  Middle  Ages,  about  A.D.  500  to  1 100,  when 
the  village,  championed  by  the  various  Germanic  peo- 
ples, again  triumphed  over  the  town.  Our  modern 
period  began,  as  far  as  economic  history  is  concerned, 
with  the  rebirth  of  town  economy  and  town  culture 
about  A.D.  noo.  There  will  probably  be  no  more 
such  historic  cycles,  for  the  struggle  between  town  and 
village  economy  has  been  won  by  a  third  organiza- 
tion, dominated  not  by  the  town  but  by  the  large  com- 
mercial city. 

We  know  but  little  about  the  early  economic  his- 
tory of  China  or  India.     Probably  long  before  the   China 
birth  of  Christ,  towns  grew  up  in  China,  whether  for 


ii4    INTRODUCTION  TO  ECONOMIC  HISTORY 


Date  of 
town  be- 
ginnings 


Mediter- 
ranean 
colonized 
towns 


the  first  time  or  not  is  uncertain;  but  there  is  no 
reason  to  doubt  that  their  existence  has  been  con- 
tinuous to  this  day.  This  is  the  stagnation  the  West- 
erners call  "Chinese,"  a  civilization  not  so  low  as  the 
village  nor  yet  so  high  as  the  metropolis,  the  civiliza- 
tion of  the  town.  Artistically  and  morally  it  is  high, 
but  materially  and  scientifically  it  is  low.  India  was 
not  so  far  advanced  as  China.  Towns  existed  there, 
but  they  were  frequently  only  urban  villages.  Where- 
as China  stagnated  at  the  threshold  of  developing 
into  a  higher  stage,  metropolitan  economy,  India 
stagnated  at  the  threshold  of  town  economy — until 
Europeans  arrived. 

The  exact  time  when  individual  towns  originated 
is  generally  difficult  to  discover.  Some  dates  have 
been  handed  down,  but  they  are  either  approximate 
or  questionable.  Of  course,  towns  that  were  estab- 
lished late  in  history  by  other  towns  and  some  founded 
by  sovereigns  such  as  Alexander  the  Great,  have  a 
beginning  that  can  be  exactly  dated.  But  in  the  vast 
majority  of  cases,  the  dates  refer  to  town  beginnings 
which  are  so  vague  as  to  serve  no  useful  purpose  in 
economic  history.  What  we  want  to  know  is  when 
a  community  became  an  economic  town.  Often  we 
may  suspect  that  the  traditional  account  of  the  found- 
ing of  a  place  refers  simply  to  the  development  of 
the  rural  into  the  urban  village  (political  town). 

28.  CREATED  TOWNS.  Normally,  in  the  ninety- 
and-nine  cases,  towns  developed  slowly  out  of  vil- 
lages. Sometimes,  however,  they  were  created — that 
is,  brought  into  being  in  a  very  short  time.  The  most 
common  manner  of  creation  was  by  colonization.11 
The  ancient  Phoenician  towns,  such  as  Tyre  and  Sidon, 
planted  colonies  in  the  Mediterranean.  Carthage 
(founded  before  800  B.C.)  was  the  most  prominent 


TOWN  ECONOMY 


n6     INTRODUCTION  TO  ECONOMIC  HISTORY 

historically,  but  was  only  one  of  many.  The  Greek 
"city"  states  seemed  to  overflow  with  energy  and 
population,  and  like  bees  under  similar  circumstances 
swarmed  to  set  up  new  towns.  A  band  of  Corinthians 
founded  Syracuse  somewhat  before  700  B.C.  People 
of  Phocaea  ( a  Greek  town  on  the  coast  of  Asia  Minor, 
near  Smyrna)  planted  a  trading  colony  about  600 
B.C.,  at  Massilia,  the  modern  Marseille.  And  Athe- 
nians and  many  others,  in  433  B.C.,  joined  forces  to 
found  the  town  of  Thurii  in  southern  Italy,  as  a  place 
for  free  intercourse  and  untrammeled  development 
of  Greek  ideals. 

Reasons  Greeks  left  the  mother  city  that  they  might  find 
new  homes  in  which  to  burn  the  sacred  fires,  unham- 
pered by  local  tyrants  or  oligarchic  groups,  and  where 
the  getting  of  a  living  was  more  certain.  Somewhat 
different  was  the  aim  of  the  Romans  in  their  founda- 
tion of  colonies.  Their  purpose  may  have  been  at 
times  to  get  rid  of  an  over-plus  of  hungry  plebeians, 
but  it  was  chiefly  to  establish  outposts  which  would 
hold  territory  already  gained  and  prepare  for  further 
conquest.  Beginning  in  Italy  near  at  hand,  Rome 
captured  one  town  after  another,  and  especially  from 
the  4th  and  3d  centuries  B.C.,  planted  in  them  groups 
of  Roman  colonists.  When  Italy  had  been  conquered, 
the  process  was  continued  east  and  west,  north  and 
south.  The  great  majority  of  these  colonies  were 
substantially  military  garrisons  planted  on  the  sites, 
often  within  the  walls,  of  earlier  settlements.  And 
indeed,  it  has  usually  been  thus.  Rarely  in  the  older 
lands  do  we  find  an  economic  town  begun  in  the  waste 
or  wild.  It  follows  the  lines  of  some  early  village, 
rural  or  urban. 

It  is  interesting  to  note  a  parallel  between  Roman 
and  Germanic  history.     The  Germans,   from  about 


TOWN  ECONOMY 


117 


America 


the  9th  century,  began  to  win  back  from  the  Slavs 
(Russians  and  Poles)  much  of  the  territory  that 
now  makes  up  eastern  Germany.  Part  of  this  great 
task  was  later  performed  by  the  Teutonic  Order  German 
of  Knights,  a  military  order  that  established  forts 
or  castles  and  brought  colonists  from  western  Ger- 
many. The  important  town  of  Konigsberg  devel- 
oped from  such  a  military  foundation,  and  Thorn, 
founded  in  A.D.  1231,  by  the  same  Order,  was  colon- 
ized by  Germans  from  Westphalia. 

Since  the  discovery  of  America,  colonization  has  Towns  in 
led  to  the  foundation  of  many  towns.  These  towns 
usually  have  had  a  strong  agricultural  basis,  but  also 
from  the  first  a  commercial  aspect.  While  the  former 
receded  the  latter  gained.  The  process  did  not  stop 
with  the  activities  of  Europeans;  the  colonists  them- 
selves colonized.  The  towns  of  Massachusetts  were 
the  planters  of  the  early  towns  of  Connecticut  and 
Rhode  Island.  This  has  gone  on  till  town  has  fol- 
lowed town  from  the  Atlantic  to  the  Pacific.  No 
actual  home  fires  were  carried  by  the  founders,  and 
no  material  household  gods  were  taken  with  them, 
but  old  ideas  and  ideals  followed  them.  And  so 
throughout  history  we  have  to  reckon  not  only  with 
an  indigenous  culture,  one  grown  on  the  spot,  but 
also  with  a  transplanted  civilization  from  an  earlier 
center,  from  Carthage  to  New  Carthage  (Cartha- 
gena),  Rome  to  Tarraco,  Boston  to  Minneapolis. 

Individuals  of  great  power,  and  sometimes  of  great 
foresight,  have  founded  towns.  Alexander  the  Great 
seems  to  have  started  about  six  that  were  named 
after  him,  though  only  the  Alexandria  of  Egypt  at- 
tained first-rate  importance.12 

In  the  ancient  world  the  foundation  of  towns  hap- 
pened so  often  that  one  writer  living  about  a  genera- 


Founders 

of  towns 


ii8     INTRODUCTION  TO  ECONOMIC  HISTORY 


Greek 
towns 


Medie- 
val towns 


Founders 
of  towns 
in 
America 


Town 

develops 

without 

plan 


tion  before  the  birth  of  Christ  speaks  of  the  establish- 
ment of  a  town  as  a  commonplace  act.  He  even  sets 
forth  the  essential  parts,  such  as  the  temples,  gym- 
nasia, council  halls,  markets,  harbor,  docks,  streets, 
dwellings,  and  walls.13  So  deeply  rooted  did  the  idea 
of  a  foundation  become  that  most  towns  felt  obliged 
to  explain  their  beginning  by  furnishing  a  founder, 
and  Greek  literature  from  Homer  on  contains  many 
accounts  about  these  legendary  heroes.  Athens  had 
its  Theseus,  Thebes  its  Cadmus,  Tenedos  its  Tenes, 
and  Tegea  its  Tegeates.  Megalopolis  was  formed 
by  Epaminondas  as  a  bulwark  for  the  Arcadians 
against  the  Spartans.  Its  area  was  large :  the  num- 
ber of  villages  constituting  it  was  said  to  be  forty.14 

In  the  early  loth  century,  the  two  children  of 
Alfred  the  Great,  Edward  and  Ethelfled,  established 
towns  in  mid-England,  and  Henry  the  Saxon  in  East 
Germany  as  part  of  the  German  aggression  against 
the  Slavs,  already  mentioned.  In  1682  William  Penn 
founded  Philadelphia  almost  in  the  wilds.  And  occa- 
sionally nowadays  a  great  industrial  magnate  or  cor- 
poration sets  up  a  town,  such  as  Pullman  in  1880  and 
Gary  in  1906,  to  manufacture  some  commodity  on 
a  large  scale.  But  these  modern  towns  do  not  interest 
us  at  this  point  because,  although  towns,  they  are  not 
part  of  town  economy  but  of  a  stage  that  came  later. 

In  all  essentials  the  towns  that  are  founded  or 
planted  resemble  the  towns  that  have  developed 
slowly  out  of  villages.  Some  of  them  may  have  a 
little  more  regularity  at  first,  but  the  tendency  is  for 
the  community  later  to  evolve  without  plan,  growing 
here  and  there  in  answer  to  a  temporary  need.  And 
so  it  is  with  early  social  progress;  it  is  instinctive, 
comes  slowly,  feels  its  way,  has  no  vision,  but  makes 
relatively  few  mistakes.  As  witness  to  this  a  clergy- 


TOWN  ECONOMY  119 

man  once  declared,  it  is  reported,  how  benevolent  a 
Creator  we  have,  to  make  the  great  rivers  flow 
through  the  great  cities  of  the  earth. 

29.  FORM  OF  THE  TOWN.  If  the  town  was  estab- 
lished by  colonists,  or  founded  by  one  man,  or  rebuilt,  Compact 
or  moved  from  one  location  to  another,  it  might 
receive  some  degree  of  town  planning.15  But  if  it 
grew  out  of  the  village,  as  it  generally  did,  it  would 
have  no  more  plan  than  the  village  had.  And,  as  we 
have  seen,  this  was  largely  a  matter  of  conforming 
to  a  general  type,  either  the  nucleated  or  the  non- 
nucleated  village.  But  since  the  town  necessarily  laid 
ctress  on  fortification,  the  form  tended  to  be  compact, 
such  as  could  be  compassed  by  walls  or  was  near  to 
a  central  castle  or  fort. 

Towns  generally  have  a  center  distinguished  by  Churches, 
temples  or  churches  (sometimes  a  cathedral  or  bish-  ^ark^t 
op's  church),  a  citadel  or  castle,  and  a  market  place  p'ace 
(the  old  village  commons?)  near  which  are  the  shops 
of  the  artisans  and  the  stores  of  the  traders. 

In  flourishing  towns  such  as  ancient  Rome  and  medi-  Town 
eval  London  there  developed  special  market  places, 
for  the  sale  of  special  commodities  such  as  corn, 
cattle,  and  fish.  But  the  limits  of  growth  within  the 
old  area  were  very  restricted.  Walls  might  be  torn 
down  and  extended  here  and  there,  but  this  was  an 
expensive  process.  The  almost  universal  result  was 
growth  beyond  the  old  boundaries,  outside  of  the  old 
walls.  To  the  town  (urbs)  were  added  the  suburbs  Suburbs 
(French  faubourg,  German  Vorburg}  outside  the 
town. 

When  the  town  was  built  on  a  river — frequently 
on  the  bend  of  a  river — the  suburban  growth  would 
first  take  place  on  the  other  side,  where  there  was 
plenty  of  room.  A  bridge  would  be  built  to  connect 


120    INTRODUCTION  TO  ECONOMIC  HISTORY 


TOWN  ECONOMY  121 

the  parts,  and  sometimes  on  this  bridge  shops,  stores, 
or  mills  would  be  located,  as  on  the  bridge  crossing 
the  Arno  in  Florence  and  that  crossing  the  Thames  in 
London.     Additional    markets    and    shops,    stores, 
warehouses,  and  public  buildings  would  be  erected  on 
the  other  bank.     In  many  towns  not  only  did  certain 
streets  become  identified  with  certain  trades,  but  cer-  Ghettos, 
tain  sections  with  special  groups  of  persons.     The   j'jjj  *°n_ 
ghetto  of  the  Jews  was  often  a  walled  district  and   tury 
locked  up  at  night,  so  that  no  Jew  might  leave  his 
own  quarters  and  no  Gentile  enter  Jewish  precincts. 
Ghettos  prominent  in  history  were  found  in  Prague, 
Vienna,  and  Frankfort. 

The  general  manner  of  town  growth  was  not  ac- 
cording to  plan  but  accretion.  The  original  nucleus 
was  a  village,  rural  or  urban.  To  this,  other  features 
were  added.  Even  the  colonized  or  founded  town, 
lost  its  regularity  or  special  form  as  it  grew. 

30.      THE     EARLY    TOWN:     COMMERCIAL.       In     the 

early  part  of  its  history,  the  town  was  pre-eminently 
commercial.     This  does  not  mean  that  there  was  no  Corn- 
manufacture  in  it,  but  that  such  manufacture  as  ex-  ™*trce' 
isted  was  either  for  household  use  or  was  insignificant  manufac- 
in  amount.16     When  the  village  was  developing  into  tur.e> 

miikcs 

the  town  and  when  the  early  town  was  struggling  to  the  town 
win  a  place  for  itself,  manufactures  were  carried  on 
chiefly  in  the  country.     Relatively  late  in  its  develop- 
ment, the  town  learned  that  it  might  serve  the  coun- 
try-side by  specializing  in  manufactures.     Although 
in  some  cases  only  a  few  generations  would  be  re- 
quired, in  others  a  thousand  years  have  not  been  long 
enough  to  establish  town  industries.     In  the  8th  and 
Qth  centuries   Russian   towns  were   commercial   and  Russian 
such  they  remain  to  this  day  in  the  great  majority  of  towns 
cases.     Prominent  among  such  early  places  are  Kiev, 


122    INTRODUCTION  TO  ECONOMIC  HISTORY 

Smolensk,  and  Novgorod.17  Everywhere  we  find  that 
commercial  pursuits  were  more  prominent  than  indus- 
trial. The  cities  of  the  ancient  world  were  noted 
for  their  commerce  before  they  were  famed  for  their 
manufactures.  And  so  with  the  medieval.  Com- 
mercial associations  generally  appear  before  indus- 
trial in  the  Middle  Ages.  And  merchants  are  found 
grown  rich  in  worldly  goods  and  powerful  in  the  gov- 
ernment of  the  town  before  artisans  made  any  head- 
way in  their  business,  to  say  nothing  of  their  attaining 
political  power. 

Early  About  these  early  merchants,  whether  dealing  in 

town  local  or  extended  trade,  we  know  very  little  that  is 
chants  specific  but  much  in  a  general  way.  Even  in  early 
biblical  times  merchants  were  held  in  high  esteem: 
"Who  hath  taken  this  counsel  against  Tyre,  the 
crowning  city,  whose  merchants  are  princes,  whose 
traffickers  are  the  honourable  of  the  earth?"  18  Most 
of  the  merchants,  however,  were  not  princes  but  small 
traders,  the  possessors  of  very  little  capital.  Some- 
times their  ventures  were  far  afield,  but  more  often 
Articles  quite  near  at  hand.  They  dealt  in  four  principal 
of  town  groups  of  commodities.  One  was  made  up  of  such 
raw  materials  as  wool,  flax,  hides,  and  foodstuffs  such 
as  fish,  grain,  olive  oil,  salt,  and  spices.  Another 
consisted  of  semi-manufactured,  goods,  prepared  in 
the  country,19  notably  wine,  beer,  butter,  cheese,  pitch, 
leather,  and  vegetable  dyes.  The  third  group  in- 
cluded semi-manufactured  wares  from  mining  or 
quarrying  villages,  iron,  tin,  copper,  and  millstones. 
And  the  last  a  few  manufactures  from  towns  more 
advanced  economically,  such  wares  as  fine  cloths  and 
weapons.20  As  time  went  on,  those  simply  called 
"merchants"  became  specialized,  and  bore  names  in- 
dicating the  nature  of  their  wares — vintners,  corn- 


TOWN  ECONOMY 


123 


mongers,  fishmongers,  salters,  ironmongers,  splcers, 
and  drapers.  The  retailers  were  often  called  "re- 
grators,"  while  those  who  engaged  in  wholesale  of  a 
general  character  continued  to  bear  the  name  of 
"merchants,"  sometimes  mercers. 

We  are,  of  course,  much  interested  in  the  personal 
condition  of  these  merchants,  creators  of  the  town 
and  of  town  economy.  In  both  ancient  and  medi- 
eval times  merchants  were  normally  free  men.  The 
older  the  town,  the  more  likely  was  this  to  be  the  case. 
When  free  villages  developed  into  towns,  they,  of 
course,  became  free  towns.  Freedom  was  necessary 
to  trade,  though  merchants  might  buy  and  sell  slaves, 
and  indeed  use  slaves  in  their  trade,  as  among  the 
Greeks  and  Romans,  with  considerable  success,  espe- 
cially when  the  slaves  had  themselves  been  free  mer- 
chants before  being  captured  and  when  in  their 
captivity  they  had  been  promised  freedom  for  faith- 
ful service. 

But  many  towns  developed  out  of  the  dependent 
villages.  This  was  quite  feasible,  provided  the  lord 
of  the  village  granted  freedom  to  the  traders.  But 
for  rapid  and  outstanding  success,  many  liberties  and 
great  privileges  were  necessary.  In  1181  and  1188 
Liibeck,  already  a  town  but  not  very  prosperous, 
received  from  its  lord  such  concessions,21  and  its 
prosperity  was  henceforth  assured.  The  granting  of 
charters  of  liberties  was  a  common  event  in  the  later 
Middle  Ages.  Sometimes  it  was  due  to  the  enlightened 
policy  of  the  town,  sometimes  to  the  lord's  need  for 
the  money  that  the  townsmen  were  willing  to  pay  for 
a  renewal  of  old  privileges  or  the  grant  of  new  ones. 
King  John  (1199-1216)  of  England,  wholesale  pur- 
veyor of  charters,  well  illustrates  how  much  good  a 
bad  king  in  need  of  money  may  do.  The  potentates 


Mer- 
chants 
not 

servile 
but  free 


Manors 
become 
towns 


Charters, 
especially 
begin- 
ning the 
loth  cen- 
tury 


124    INTRODUCTION  TO  ECONOMIC  HISTORY 

of  the  Church  were  generally  slow  in  granting  such 
liberties,  and  accordingly  in  ecclesiastical  towns  espe- 
cially at  a  later  date,  we  find  numerous  uprisings  on 
behalf  of  greater  freedom. 

The  merchant  was  the  town's  original  champion 
of  selfgovernment.    He  sought  freedom  from  the  lord 
Mer-         of  the  town,  if  there  was  one.    He  was  at  first  approx- 
ancUelf-    'mate^y  equal  to  his  fellow  merchant,  and,  as  we  shall 
govern-      see,  he  formed  associations  for  the  mutual  benefit  of 
merchants.     But  we  must  not  erect  all  this  into  a 
conscious  idealizing  of  liberty,  equality,  and  frater- 
nity, such  as  existed  at  the  time  of  the  French  Revo- 
lution. 

In  Cologne  a  typical  uprising  took  place,  under  the 
1074          leadership  of  a  young  merchant.     The  lord  of  the 
Typical      town  was  the  Archbishop   of  Cologne.     When  the 
i"rf  Ger-S     Bishop  of  Miinster  was  ready  to  go  home  after  pay- 
many         ing  a  visit  to  Cologne,  the  Archbishop  ordered  his 
own  servants  to  find  a  suitable  boat  for  the  Bishop. 
The  servants  violently  seized  one  belonging  to  a  prom- 
inent merchant  of  the  town.     The  merchant's  son, 
as  bold  as  he  was  strong,  hurriedly  gathered  together 
the  young  men  of  the  town,  and  after  much  rioting, 
expelled  the  Archbishop  and  his  officials.     The  Arch- 
bishop had  been  accused  of  laying  unjust  burdens  on 
the  people,  insulting  honorable  citizens   (he  had  an 
uncontrollable  tongue),  and  depriving  innocent  per- 
sons of  their  property.     During  the  disturbance  the 
valiant  conduct  of  the  citizens  of  another   Rhenish 
town  in  expelling  their  Bishop-lord  was  proclaimed 
and  extolled.22 

Southern         In  the  town  of  Carcassonne,  typical  as  far  as  the 

about"'      present  interest  is  concerned,  there  were  four  groups 

1107  of  persons  taking  the  oath  of  fidelity  to  the  lord  of  the 

town.     One  was  made  up  of  burgesses  or  merchants, 


TOWN  ECONOMY  125 

one  of  knights,  and  the  others  were  the  "remainder 
of  the  people,"  and  the  suburbans.23  The  knights 
are  placed  first  as  occupying,  at  least  officially  if  not 
actually,  the  most  important  place  in  the  town.  This 
aristocratic  element  of  town  life,  no  matter  by  what  Town 
local  name  it  is  known,  we  may  call  ''patrician. "  2*  Patncians 
The  patricians  were  members  of  families  owning  land 
and  tenements,  generally  within  the  town  and  some- 
times outside  as  well.  This  aristocratic  class  arose  in 
different  ways  in  different  places.  Probably  most 
commonly  the  patricians,  at  least  the  oldest  families, 
were  the  descendants  of  those  who  had  possessed  the 
land  in  the  village  stage.  In  case  of  a  town  being 
conquered  by  another  people,  the  conquerors  would 
seize  the  land  and  tenements  and  leave  the  active  hard 
work  to  the  conquered.  The  conquerors  would  be 
the  patricians  and  the  conquered  the  plebeians  or 
populace.  War  would,  of  course,  have  its  effect  on 
the  landowners  who  always  constituted  the  bulwark 
in  military  struggles.  Some  families  would  disap- 
pear and  their  estates  fall  into  the  hands  of  others.25 
Since  the  total  amount  of  land  was  strictly  limited, 
especially  in  a  walled  town,  the  owners  of  the  land 
enjoyed  monopoly  advantages — an  assured  income  of 
ample  proportions. 

Doubtless,   the   town   gentry,   or  patricians,   were 
recruited  from  similar  landed  classes  in  the  country. 
It  is  not  unlikely  that  the  knights,   found  in  some 
towns  as  a  standing  garrison  of  defense,  tended  to 
merge  into  the  class  of  gentry.     Such  knights  existed 
in  certain  strategic  centers,  most  of  which  had  prob- 
ably grown  out  of  urban  villages.    In  England  knights   London, 
and   borough-thegns,    formed   gilds    as   early   as   the    g™^ 
9th  century.20  Exeter 

In  the  history  of  English  towns,  patricians  played 


126    INTRODUCTION  TO  ECONOMIC  HISTORY 

a  relatively  minor  role,  but  in  German  and  Italian 
towns  they  were  generally  all-powerful.  Venice  is 
an  outstanding  example  of  a  town  ruled  and  ruled 
well  by  a  patrician  or  noble  class,27  not  for  a  short 
period  but  for  a  thousand  years.  Often  the  patricians 
divided  into  two  or  more  groups  and  waged  war 
against  one  another.  One  of  the  tragedies  resulting 
from  such  conflict  has  been  dramatized  by  Shake- 
speare in  "Romeo  and  Juliet." 

In   Florence,    as   generally   in  Italian   towns,    the 

Factions     people  were  divided  into  two  groups,  the  Guelfs  and 

ence  tne  Ghibellines.  The  latter  came  to  support  the 
Emperor  of  the  Holy  Roman  Empire,  the  former  the 
Pope,  in  their  struggle  for  political  supremacy  in 
Italy.  The  two  parties  carried  their  hostility  into  the 
petty  affairs  of  private  life.  One  party  wore  a  white 
rose,  the  other  a  red  one.  One  party  carried  the 
feather  on  one  side  of  the  hat,  the  other  on  the  oppo- 

1267  site  side.  The  Ghibellines  were  at  last  expelled  from 
Florence,  leaving  the  Guelfs  supreme.  But  the  Guelfs 
in  turn,  or  at  least  the  Guelf  nobles,  split  into  two 
factions,  the  Blacks  and  the  Whites,  each  with  its 

1302  followers.  In  due  time  the  Whites,  at  least  many  of 
their  leaders,  were  banished  by  the  victorious  Blacks.28 
To  the  former  Dante  belonged,29  and  when  his  party 
lost  he  suffered  exile  not  only  from  his  native  city 
but  from  the  spots  sacred  to  the  memory  of  his  be- 
loved Beatrice  who  was  the  inspiration  of  The  New 
Life  and  the  figure  of  blessedness  in  The  Divine 
Comedy. 

Roman  The  most  famous  noble  or  patrician  class  was  that 

of  ancient  Rome,  the  origin  and  history  of  which  have 
been  the  subject  of  much  dispute.  Whatever  the  or- 
igin of  the  patricians,  it  is  clear  that  they  dominated 
Rome  from  a  very  early  date,  though  they  were  grad- 


cians 


TOWN  ECONOMY 


127 


ually  required  to  share  power  with  their  opponents, 
the  plebeians.     Then  merging  with  the  richer  plebe-  Fr°m  the 
ians,  they  continued  to  be  influential,  even  powerful,  turyB.c. 
in  the  affairs  of  the  Roman  Republic. 

The  early  Roman  patricians  with  their  interest  in 
the  land  suggest  an  agricultural  aspect  of  the  town  T°^n 
that  is  easily  overlooked.  The  town  was  essentially  ture 
commercial,  but  it  did  not  at  once  give  up  all  the  agri- 
cultural pursuits  that  had  characterized  the  village. 
Beyond  the  town  walls  lay  the  town  pastures  and 
arable  fields.30  In  ancient  times  and  in  the  China 
visited  by  Marco  Polo,  agriculture  was  a  joint  occu-  I3th 
pation  with  commerce.  In  medieval  Leicester,  there 
were  about  3830  acres  outside  the  walls  probably 
including  meadow  and  waste  land,  and  more  than 
130  acres  within  the  walls.31  Even  in  late  medieval 
towns  agricultural  production  was  relied  upon  to  sup- 
ply at  least  a  part  of  the  foodstuffs  needed.  Most  of 
the  houses  had  cow  stalls,  granaries,  and  wine  presses, 
and  the  town  had  its  shepherd.  Citizens  had  at  a 
late  date  to  be  warned  not  to  allow  their  pigs  to 
wander  about  the  streets.  In  one  English  town  excep- 
tion was  made  in  favor  of  swine  with  young.32  And 
in  the  i/|.th  century  it  was  enacted  by  London  authori- 
ties that  anyone  wishing  to  feed  a  pig  must  feed  it  in 
his  house.33  The  whole  problem  of  food  supply  for 
the  early  town  is  interesting.  How  did  the  merchants 
who  specialized  in  commerce  provide  themselves, 
their  families,  and  servants  with  food?34  The  small 
holdings,  the  valued  fish  ponds,  the  family  cow  tended 
by  the  town's  cowherd,  the  sty  of  pigs,  and  the  door- 
step chickens  would  do  their  part,  but  still  there  would 
be  supplies  to  be  furnished,  either  by  the  peasant  in 
neighboring  villages  or  by  the  lords  on  near-by  lands, 
some  of  them  perhaps  patricians  of  the  town  itself. 


128    INTRODUCTION  TO  ECONOMIC  HISTORY 


Patri- 
cians and 
mer- 
chants in 
hostility 


Patri- 
cians and 
mer- 
chants at 
peace 


A  young 
German 
merchant 


The  duality  of  early  town  life  arose  through  the 
existence  of  the  two  classes,  patricians  and  merchants. 
We  should  not  think  of  them  as  merely  existing  side 
by  side.  In  fact,  their  relationship  was  close,  either 
in  hostility  or  friendship.  In  medieval  Florence  the 
victory  of  the  noble  faction  of  the  Blacks  over  that 
of  the  Whites  was  due  largely  to  the  help  received 
from  the  rich  merchants.  Or,  we  may  put  it  another 
way,  the  Blacks  won  because  they  were  chiefly  rich 
merchants,  while  the  Whites  lost  largely  or  wholly 
because  they  were  only  landed  nobles.35 

Much  less  dramatic  than  their  feuds  and  battles 
are  their  peaceful  relationships.  To  regain  their 
wealth  it  probably  happened  that  some  patricians  of 
broken  fortunes  entered  the  ranks  of  the  merchants.36 
Nevertheless,  in  the  early  town  it  was  probably  more 
common  for  the  merchants  who  had  attained  wealth 
to  invest  in  lands,  intermarry  with  the  people  of 
birth,37  and  ultimately  themselves  to  become  patri- 
cians. The  rich  in  land  and  the  rich  in  goods  some- 
times belonged  to  the  same  clubs,  participated  in  the 
affairs  of  the  senate  or  council  and  intermarried,  as 
illustrated  by  the  town  of  Lubeck,  North  Germany. 
The  story  of  Bertram  Morneweg  is  significant.  Ber- 
tram had  been  a  waif  who  was  picked  up  and  adopted 
by  Marquart  von  Bardewick,  a  patrician  and  mer- 
chant. After  learning  the  business  of  merchant, 
Bertram  left  his  master  and  even  his  master's 
daughter  whom  he  loved.  Going  to  Riga,  he  became 
the  partner  of  a  merchant  who  had  known  him  favor- 
ably in  Lubeck.  Bertram  prospered,  and  when  his 
partner  died,  he  became  his  partner's  heir.  Loading 
his  wealth  on  a  big  ship,  he  returned  to  Lubeck  to 
renew  the  friendship  with  his  old-time  patron  and  to 
marry  his  patron's  daughter.  For  the  aged  he  en- 


TOWN  ECONOMY 


129 


dowed  a  hospital,  which  has  long  been  a  landmark 
in  the  town.  And  for  the  young  he  left  this  simple 
story  of  material  success  and  of  faithful  love,38 

Some  of  the  most  difficult  of  the  problems  that 
the  town  had  to  face  were  at  least  partly  solved  by 
associations  of  town  merchants.  Pirates  infested  the 
rivers  and  seas,  and  land  robbers  lay  in  wait  on  the 
highways  ready  to  seize  goods  or  to  exact  a  fee  for 
allowing  them  to  pass  untouched.  The  association  of 
merchants,  whether  temporary  or  permanent,  was  the 
only  solution  possible  at  the  time.  A  good  illustra- 
tion of  the  temporary  association  comes  from  the  loth 
century.  Some  Saxon  merchants  journeyed  south- 
ward through  St.  Omer  and  then  eastward  till  they 
met  other  merchants  from  Verdun  going  southward. 
For  safety's  sake,  and  doubtless  too  for  companion- 
ship, the  two  bands  kept  together  as  well  as  possible, 
till  the  Saxons  went  eastward  towards  Rome  and  the 
Frenchmen  westward  towards  Spain.39 

Temporary  associations  were  but  makeshifts  for 
the  day  or  event.  Only  permanent  associations  could 
offer  a  reasonable  expectation  of  solution  of  many 
problems.  The  merchants  of  many  towns  formed 
gilds  for  their  mutual  benefit,  in  both  the  ancient 
and  medieval  periods.  Sometimes  in  the  Middle  Ages 
it  was  the  merchants  of  one  town  that  banded  together 
to  trade  with  a  certain  other  town,  for  example,  the 
merchants  of  Cologne  trading  in  London.  Some- 
times the  merchants  of  different  towns  trading  in  some 
one  center  formed  an  association,  for  example,  the 
merchants  of  more  than  thirty  North  German  towns 
formed  a  society  in  the  town  of  Wisby  in  the  Island 
of  Gotland,  and  thereby  gained  great  power  and 
prestige  in  both  economic  and  political  affairs.  The 
logical  ultimate  step  was  the  formation  of  a  league, 
not  of  individuals  but  of  towns. 


Tempo- 
rary asso- 
ciation 


Perma- 
nent asso- 
ciations 


i2th 
century 


1 3th 

century 


1 4th 
century 


i3o    INTRODUCTION  TO  ECONOMIC  HISTORY 


Han- 
seatic 


TOWN  ECONOMY  131 

There  were  more  than  seventy  towns  in  this  Hanse-  Han- 
atic  League,  a  few  of  them  being  located  in  the  Dutch  League 
and  Belgian  Netherlands,  but  the  great  majority  in 
northern  Germany.  The  chief  members  were  Lii- 
beck,  Bremen,  Hamburg,  and  Dantzig.  This  con- 
federation of  towns  had  an  assembly  that  met  when- 
ever there  was  business,  commonly  at  Liibeck.  Here 
a  general  line  of  action  was  decided  upon,  whether 
the  negotiation  of  a  treaty  with  a  foreign  power  or 
the  declaration  of  war  against  a  prince  who  was  hos- 
tile to  their  interests. 

The  Hanseatic  towns  traded  with  one  another,  but 
the  distinctive  trade  that  the  League  supported  was 
with  certain  foreign  counters  or  trading  posts,  at  counters 
Bruges,  London,  Novgorod,  and  Bergen.  In  these 
foreign  towns  were  found  the  League's  hall  and 
grounds,  fortified  and  managed  by  native  unmarried 
Germans  sworn  to  serve  the  home  towns.  Here  in 
these  posts,  individual  German  merchants,  or  their 
agents,  safely  traded  with  the  natives  or  with  other 
foreigners.  A  Liibeck  trader  sold  to  a  London 
merchant  fish,  lumber,  or  Swedish  iron,  buying  in 
return  raw  tin,  pewter  vessels,  or  wool.  Or  the 
Liibecker  sold  to  a  Venetian  linen  cloth  and  fine 
furs,  buying  glassware  or  cloth  of  gold.  In  addition 
to  the  four  chief  towns  mentioned,  there  were  more 
than  a  score  of  foreign  towns  of  less  importance  in 
which  the  League  or  some  of  the  member  towns  had 
trading  privileges. 

The  league  was  developed  to  protect  its  members 
against  pirates  on  the  sea  and  to  secure  from  princes 
commercial  privileges,  such  as  low  customs  duties 
and  protection  while  engaged  in  trade.  It  was  pri- 
marily a  commercial  league,  a  good  example  of  the 
economic  force  in  public  affairs.  It  was  strong  as 


132    INTRODUCTION  TO  ECONOMIC  HISTORY 


League's 
decline 


1 6th 
century 


Com- 
mercial 
morality 


Maritime 
codes 


Com- 
mercial 
monopoly 


long  as  the  states  in  which  it  traded  were  weak.  But 
as  Holland,  Sweden,  England,  and  France  rose  to 
power,  the  League  declined.  A  confederation  even 
of  rich  towns  was  not  a  match  for  a  closer  organiza- 
tion based  on  national  feeling  and  national  wealth 
guided  by  a  more  or  less  autocratic  government.  The 
fleets  of  the  League  might  chase  the  pirates  from  the 
northern  seas,  but  they  could  not  hold  their  own 
against  the  rising  national  states. 

A  more  subtle  problem  than  protection  against 
pirates  and  securing  commercial  privileges,  and  one 
not  capable  of  such  dramatic  solution,  was  the  estab- 
lishment of  a  commercial  morality.  The  way  had  been 
somewhat  prepared  by  the  trade  of  the  previous 
stages,  but  now  there  were  specialized  traders  whose 
very  existence  depended  upon  their  credit  and  reliabil- 
ity. Much  of  the  morality  was  embodied  in  unwrit- 
ten law,  in  the  Middle  Ages  called  "the  law  mer- 
chant." At  the  fairs  this  was  enforced  by  the  hastily 
improvised  courts  of  dusty-footed  merchants.  Some 
of  the  law  was  recorded  in  the  great  maritime  codes, 
such  as  that  of  Rhodes  in  antiquity,  and  those  of 
Oleron,  Wisby,  and  Barcelona  in  the  Middle  Ages. 
Much  was  written  down  in  the  form  of  municipal  or 
urban  law.  In  some  form  or  other  these  early  prin- 
ciples, laws,40  and  codes  have  come  down  to  us  to  the 
present  day  without  a  break,  constituting  an  important 
pillar  in  our  modern  civilization. 

To  the  town  we  also  owe  our  ideas  and  practices  of 
trade  monopoly.  It  seems  a  safe  inference  that  the 
early  towns  were  actually  forced  by  circumstances  to 
grant  to  their  merchants  a  monopoly  of  certain  kinds 
of  trade,  notably  of  retail  trade  within  the  town,  and 
all  trade  just  beyond  the  town  walls,  except  such  as 
took  place  at  the  periodic  fairs.  A  great  advantage 


TOWN  ECONOMY 


133 


was  given  to  the  town  merchant  by  exempting  him 
from  local  tolls. 

Public  improvements  had  to  be  made  from  the  very 
first,  walls  to  be  erected,  roads  and  bridges  to  be 
built,  and  market  places  to  be  paved  and  kept  clean. 
Medieval  English  towns  met  these  problems  by  dif- 
ferent taxes.  There  was  one  for  general  purposes, 
one  for  building  and  repairing  the  walls,  and  one  for 
paving  the  squares  and  streets. 

Trade  demanded  standard  weights,  measures,  and 
coins.  In  the  case  of  the  coins,  money  changers  had 
to  be  licensed  to  change  outside  money  for  its  proper 
local  equivalent.  In  the  Middle  Ages  the  great  tribal 
and  national  monarchs  made  efforts  to  provide  stand 
ard  units  for  the  whole  kingdom,  or  for  a  large  part 
of  it.  The  pound  of  silver  of  Tours  and  that  of  Paris 
became  the  two  recognized  monetary  units  for  France, 
and  the  Winchester  and  London  bushel  for  England. 

Perhaps  the  supreme  problem  of  the  struggling 
early  town  was  to  attract  people  to  settle,  people  who 
would  help  bear  financial  burdens  and  aid  in  defense. 
At  times  invitations  were  sent  out  to  likely  districts 
to  send  settlers.  A  general  rule  in  the  medieval  towns 
of  western  Europe  was  that  a  serf  escaping  from  his 
lord  and  living  within  the  town  for  a  year  and  a  day 
became  a  free  man.  As  time  went  on,  this  rule  helped 
to  populate  the  towns  with  liberty-loving  and  ambi- 
tious men. 

31.  THE  LATER  TOWN:  COMMERCIAL  AND  IN- 
DUSTRIAL. As  long  as  the  town  remained  commer- 
cial or  largely  commercial,  few  people  could  be  sup- 
ported. •  But  when  it  developed  manufactures,  work 
was  provided  for  hundreds  and  thousands  of  families. 
In  the  three  centuries  before  the  birth  of  Christ  we 
find  peasants  flocking  to  the  towns  of  Greece  and  Asia 


Public 
works 


Trade 
units 


Town 

seeks 

settlers 


Commer- 
cial town 
takes  on 
manu- 
factures 


134    INTRODUCTION  TO  ECONOMIC  HISTORY 


Manu- 
facture 
for  use 


Manu- 
facture 
for  sale 


Rome  and 
Athens 
con- 
trasted 


Minor  to  engage  largely  in  manufacture.  Similar 
conditions  prevailed  in  western  Europe  from  1200 
to  1500.  No  one  year,  in  many  cases  not  even  a 
single  century,  can  be  chosen  as  the  beginning  of  the 
second  phase  of  town  development.  It  is  a  gradual 
change  and  one  of  great  importance. 

The  manufacture  of  goods  for  use  is,  of  course, 
much  older  than  the  town.  It  took  place  in  the  house- 
hold, and  the  finished  product  was  consumed  by  the 
household  group.  Before  the  town  came  into  exist- 
ence, the  raw  materials  used  in  household  manufac- 
ture were  almost  wholly  grown,  or  otherwise  pro- 
duced, by  the  family  itself.  In  the  first  phase  of  town 
economy  many  of  the  raw  materials  were  produced 
by  others,  near  or  far,  and  sold  through  the  town 
traders.  But  now  in  the  second  phase  some  of  the 
townsmen  make  it  their  special  business  to  manufac- 
ture some,  not  all,  of  the  goods  needed  by  others 
whether  living  in  town  or  country.  Very  early  much 
of  the  weaving,  fulling,  and  dyeing  left  the  house- 
hold while  spinning  lingered  on.  The  making  of 
shoes  was  specialized  long  before  the  baking  of 
bread.41  Illustrations  of  both  of  these  facts  are 
found  alike  in  ancient  and  medieval  history. 

Just  as  some  articles  were  made  outside  the  house- 
hold sooner  than  others,  so  did  some  towns  add  the 
industrial  to  the  commercial  function  relatively  earlier 
in  their  development  than  others.  While  Rome  re- 
mained a  town  of  soldiers  and  laborers,  of  admin- 
istrators and  merchants,  other  towns  developed  their 
manufactures  as  well  as  their  trade.  Athens  was 
famous  for  its  vases,  statuettes,  and  silver  work, 
Antioch  for  its  cloth,  Puteoli  for  its  iron  and  pot- 
tery, and  Capua  for  its  bronze  and  copper  wares. 
Rome  remained  economically  stunted  while  the  other 


TOWN  ECONOMY 


135 


towns  developed  normally.  The  victorious  Rome  had 
such  a  ready  supply  of  slaves  that  the  households 
found  it  profitable  and  convenient  to  employ  them  in 
manufacture  as  well  as  in  menial  service.  Accord- 
ingly, industry  was  despised  as  servile,  freemen  avoid- 
ing it  for  other  occupations.42  In  medieval  times  Medieval 
Florence  soon  became  famous  for  its  fine  cloth,  Dinant 
for  its  copper  wares,  and  Ghent,  Bruges,  and  Ypres 
for  their  woolen  cloth.  At  the  same  time  some  of 
the  North  German  towns  were  remaining  largely 
commercial,  and  the  Russian  towns  almost  wholly 
commercial.  Indeed,  the  Russian  town  to  this  day 
is  only  slightly  industrial,  as  has  been  already  noted. 
Or,  as  we  may  put  it,  the  Russian  town  is  still  in  the 
commercial  phase. 

The  fully  developed  town  may  have  been  known   Manufac- 
far  and  wide  for  some  special  product,  but  usually  its  * 


a  town 


output  for  local  use  was  quite  varied.  In  a  medieval 
town  we  find  the  following  goods  commonly  pro-  century 
duced:  cloth,  caps,  and  stockings;  fur,  leather,  shoes, 
saddles,  and  harness;  nails,  tools,  pins,  pewter  ves- 
sels, copper  utensils,  cutlery,  swords,  and  armor; 
wooden  boxes,  barrels,  cups,  and  ladles,  bows  and 
arrows;43  gold  and  silver  plate  and  jewelry.  Many 
of  these  commodities  were  the  products  of  separate 
crafts,  such  as  the  weavers,  cappers,  skinners,  tan- 
ners, saddlers,  pinners,  pewterers,  armorers,  cutlers, 
joiners,  ladlers,  bowyers,  fletchers,  and  goldsmiths. 
The  word  "craft"  means  trade,  occupation,  or  even 
profession.  All  the  trades  just  mentioned  were  in-  Crafts 
dustrial,  but  occupations  purely  commercial  are  also 
included,  for  example,  mercers,  spicers,  apothecaries, 
vintners,  and  even  barbers,  judges,  and  notaries. 
When  we  wish  to  speak  of  an  industrial  craft,  we  may 
use  the  word  "handicraft."  The  handicraftsman 


136    INTRODUCTION  TO  ECONOMIC  HISTORY 


Roman 
black- 
smith 


Localiza- 
tion of 
crafts  in 
the  town 


1290  f. 


Craft 
gild 


himself,  however,  was  only  partly  industrial.  He  had 
to  buy  his  raw  materials  and  to  sell  his  finished  prod- 
ucts. Roman  tombstones  occasionally  represent  the 
work  of  the  handicraftsman.  One  shows  on  one  side 
a  blacksmith  forging  a  blade;  on  the  other  side  he 
is  standing  near  a  small  rack  containing  his  finished 
wares,  knives  and  sickles,  selling  them  to  a  customer." 
The  shops  of  many  such  handicraftsmen  have  been 
unearthed  at  Pompeii,  some  containing  both  tools  and 
products.  A  tailor  shop  of  the  2Oth  century  is  a  good 
illustration  also,  though  the  tailor  does  not  make  the 
suit  till  he  gets  an  order. 

The  various  crafts  or  businesses  were  localized 
within  the  town,  as  we  have  seen,  just  as  the  nobles 
had  been  localized,  one  dominating  a  certain  section 
of  the  town,  another  a  different  one.  In  medieval 
London  the  names  of  streets  indicate  the  special  busi- 
ness of  its  occupants;  examples  are  Ironmongers 
Lane,  Hosiers  Lane,  and  Bowyers  Row.  The  fish- 
mongers were  located  near  Billingsgate,  on  the  water 
front,  and  the  money  lenders  on  Lombard  Street, 
where  Italians  or  Lombards  dominated  the  loaning 
and  changing  of  money  after  the  expulsion  of  the 
Jews.  Such  localization  comes  about  even  in  our 
own  day,  notably  in  the  new  automobile  industry. 
It  happens  because  of  the  great  advantage  that  the 
newcomer  has.  The  last  craftsman  to  start  up  in 
business  is  anxious  to  get  the  advantage  of  location, 
so  he  goes  to  the  street  where  others  of  his  trade  are, 
hoping  that  customers  looking  for  the  store  or  shop 
of  another  will  be  arrested  by  his  sign  and  his  wares 
on  display. 

When  the  members  of  a  craft  were  sufficiently 
numerous,  they  sought  to  form  a  craft  gild.  St. 
Omer  had  at  least  59  crafts  at  the  end  of  the  I3th 


TOWN  ECONOMY  137 

century,  the  same  number  as  Ghent  about  fifty  years 
later.  Probably  less  than  half  of  the  crafts  of  St. 
Omer  were  organized  into  gilds.45  The  craft  gild 
was  formed  to  look  after  the  interests  of  the  group 
of  craftsmen.  It  gave  them  a  place  in  the  world  which 
otherwise  they  would  not  have  had.  The  follower 
of  a  noble,  the  servant  of  a  bishop,  the  client  of  a 
Roman  money  lender,  all  were  members  of  a  big 
family  which  provided  protection,  religious  worship, 
and  economic  support.  The  craftsman  formed  a 
gild  to  help  him  in  his  business  and  to  furnish  him 
with  social  and  religious  privileges.  The  gild  might 
be  intrusted  with  ample  powers  for  the  regulation  of 
the  business  of  the  craft  as  in  the  medieval  world,  or 
it  might  be  purely  private  as  in  Greek  cities  and  in 
early  Rome.  In  medieval  London  no  one  could  be- 
come a  citizen  of  the  place  without  first  becoming  a 
member  of  a  gild.  And  if  the  gildsmen  wanted  to 
keep  down  their  numbers  they  might  do  so  by  making 
admission  to  their  gild  beyond  the  reach  of  the  ap- 
plicant, a  serious  matter  where  gilds  were  numerous 
and  well  organized.  In  London  there  was  at  least 
one  gild  in  1 130,  at  least  18  in  1 180,  and  at  least  1 10 
in  1422.  These  gilds  sought  to  prevent  all  persons  The 
from  making  the  goods  of  their  trade,  unless  they 
were  members  of  the  gild.  An  old  woman  in  London  zwang 
made  a  piece  of  tapestry  for  sale.  The  tapestry  mak-  1374 
ers  denounced  her  before  the  authorities,  for  false 
work,  for  having  put  woolen  thread  over  linen.46 
Probably  her  chief  offense  was  that  she  was  not  a 
member  of  their  craft  gild. 

Not  only  did  the  crafts  look  with  jealous  eye  upon 
encroachment   by   the    unorganized,    but   they   were   Craft 
very  finical  about  the  work  of  other  gildsmen.     The 
bowyers  wanted  no  fletcher  to  make  bows;    and  the 


138     INTRODUCTION  TO  ECONOMIC  HISTORY 

fletchers  were  opposed  to  bowyers  making  arrows.47 
The  shoemakers  would  not  allow  cobblers  to  make 
new  shoes;  while  they  themselves  agreed  to  mend  no 
old  ones.48  Leather  workers  rivaled  the  harness 
makers,  turners  the  joiners,  and  coopers  the  car- 
penters.49 

Some  have  regarded  this  independence,  exclusive 
One          independence,  as  the  rule  in  the  gild  system.     If  so, 
craft         it  soon  passed  away,  for  we  find  some  gildsmen  gain- 
nates         ing  economic  dominance  over  others.     For  example, 
others        tne  saddlers  of  London  were  accused  of  compelling 
1327          joiners,  painters,  and  lorimers — all  participating  in 
the  preparation  of  parts  of  saddles — to  work  for 
them  exclusively.     The  saddlers  were  likewise  said 
to  be  holding  back  the  piece  wages  of  these  crafts- 
1365          men.50    The  skinners  of  London  succeeded  in  prevent- 
ing the  leather  dressers  from  serving  certain  foreign 
merchants.     And  they  were  able  to  fix  a  maximum 
charge  on  piece  wages  beyond  which  the  leather  dress- 
1370          ers  might  not  go.51     The  vintners  of  the  same  city 
drew  up  the  ordinances  that  the  taverners  were  com- 
pelled to  follow.52     Such  efforts  were  really  made  to 
reduce  the  independent  craftsmen  to  the  status   of 
laborers.    And  as  was  to  be  expected,  they  ended  in 
the  bitterest  and  bloodiest  struggles.     In  Ghent  the 
weavers  (or  cloth  merchants)  had  long  tried  to  sub- 
ordinate the  fullers,  and  to  reduce  their  remuneration 
for  fulling  the  woven  cloth  to  the  very  minimum. 
1345          The  result  was  that  one  day  the  two  groups,  meeting 
on  the  market  place  fully  armed,  fought  till  exhausted. 
The  fullers  lost  the  battle  and  also  five  hundred  men, 
as  it  is  said.53     Similar  strife  took  place  in  Florence 
and  elsewhere. 

The  upshot  of  this  dominance  was  that  some  crafts 
became  rich  and  some  poor.     So  there  came  to  be 


TOWN  ECONOMY 


139 


"greater,"  "intermediate,"  and  "lesser"  craft  gilds. 
The  greater  sought  to  control  the  others.  The  inter- 
mediate sought  to  enter  the  ranks  of  the  greater. 
And  the  lesser  fought  for  independence.  Each  group, 
allying  itself  now  with  the  nobles,  now  with  the  mob, 
struggled  to  hold  or  to  increase  its  power.  The  tur- 
bulence of  the  nobility  and  the  struggles  of  the  mer- 
chants of  the  earlier  stage  were  well  matched  by  the 
ceaseless  efforts  of  the  craft  gilds  to  improve  their 
own  position. 

Within  the  craft  gild,  just  as  between  gilds,  there 
was  inequality.  The  rich  came  to  dominate  the  gild, 
excluding  the  poorer  masters  from  certain  festivities 
and  from  control  of  gild  affairs.  Indeed,  the  fully 
developed  craft  gild  in  medieval  times  was  a  hier- 
archy somewhat  resembling  that  of  the  Catholic 
Church.  At  the  top  were  the  liverymen,  masters  who 
were  rich  enough  to  wear  the  ceremonial  livery;  the 
poorer  masters;  the  journeymen  or  laborers  not  yet 
become  masters;  and  the  apprentices.  One  might 
compare  these  to  the  degrees  in  a  fraternal  lodge  of 
our  times. 

The  inequalities  within  the  gild  and  as  between 
the  gilds  reflected  the  differences  between  individuals 
and  the  ranks  to  which  they  belonged.  There  were  at 
least  seven  prominent  classes  of  persons  engaged  in 
business  in  the  town.  The  first  was  made  up  of  the 
patricians  who,  in  this  phase  of  town  economy  were 
turning  from  agriculture  and  rent  taking  to  commerce 
and  manufacture,  from  landed  property  to  personal 
property.  While  in  the  former  phase  their  numbers 
had  been  added  to  by  recruits  from  the  richer  mer- 
chants, in  this  phase  they  tended  to  merge  into  the 
other  classes  mentioned  below.  A  patrician  of  ancient 
Rome,  scorning  to  soil  his  fingers  by  actual  contact 


Greater 
and  lesser 
crafts 


Ranks 
within 
the  gild 


Classes 
within 
the  town 


Patri- 
cians 


i4o    INTRODUCTION  TO  ECONOMIC  HISTORY 


1345 

Mer- 
chants 

Southern 
Germany 


1378 


Dick 

Whit- 

tington 


with  trade  or  manufacture,  might,  nevertheless,  em- 
ploy agents  in  both.  He  might  set  up  a  slave  or  a 
freedman  in  the  business  of  goldsmith  and  receive  a 
share  of  the  profits  of  the  business.54  Or  he  might 
employ  agents  to  make  bricks  on  his  estate,  an  occu- 
pation not  far  removed  from  the  ancient  and  honor- 
able cultivation  of  the  soil.55  In  medieval  England 
the  aristocratic  bishop,  baron,  or  even  earl,  might 
utilize  gardeners  not  only  to  supply  their  own  tables 
but  to  cater  to  the  London  market,  with  their  pulse, 
cherries,  and  vegetables.56 

The  merchants  constitute  the  second  class.  Some 
of  them  belonged  to  mercantile  families  who  were 
prominent  in  the  first  phase.  The  Welser  family  of 
Augsburg  early  engaged  in  trade  between  Germany 
and  Italy.  When  it  appears  in  history  it  is  already 
rich  in  worldly  goods  and  continues  to  be  prominent 
for  several  generations  not  only  in  commerce  but  in 
mining  and  money  lending.57  And  representatives  of 
the  family  still  live  in  Ulm. 

This  group  of  old-type  merchants  engaging  wholly, 
or  almost  wholly  in  trade,  not  in  industry,  is  repre- 
sented by  the  fishmongers,  vintners,  spicers,  haber- 
dashers, and  mercers.58  The  London  haberdasher  kept 
for  sale  hats  and  caps,  lace,  beads,  boxes,  purses,  ink 
horns,  pen  cases,  paper  and  parchment,  gaming  tables, 
and  iron  chains.59  The  most  famous  of  these  mer- 
chants was  a  mercer,  Dick  Whittington,  son  of  a  coun- 
try knight,  who  went  to  London  to  make  his  fortune 
and  who,  according  to  nursery  lore,  ventured  his  cat 
on  a  trading  voyage  undertaken  by  his  master.  He 
grew  rich  supplying  nobles  with  velvets  and  damasks. 
Finally,  he  entered  the  Common  Council  of  his  city, 
later  to  become  alderman,  sheriff,  and  finally  mayor 
of  London  four  different  times.  Dying  childless,  he 


TOWN  ECONOMY  141 

established  many  charities,  which  long  endeared  his 
memory  to  Londoners.60 

This  old  group  of  merchants,  connected  with  lords 
and  knights,61  was  rivaled  in  the  second  phase  of  town 
economy  by  a  new  group  connected  with  the  manu-  New 
facturing    of    the    wares    that    they    sold.     Drapers  Jjfa"er_ 
(cloth  merchants),  saddlers,  and  skinners  well  illus-  chants 
trate  this  type  of  merchant.     Originally  engaged  in 
manufacture,  they  came  to  employ  others  to  do  the 
work,   themselves  giving  all   their   attention   to   the 
commercial  side  of  the  business.     The  Fuggers   of   i4th 
Augsburg  had  originally  been  poor  weavers  who  be-  c 
came  cloth  merchants,  and  then  mine  speculators  and 
money  lenders.     "Rich  as  a  Fugger"  was  a  common   I5tLand 
saying.62     Finally,  the  family  was  ennobled  and  is  to-  tunes 
day  enrolled  among  the  nobility  of  Austria. 

The  medieval  merchant  of  London  might  sell  his 
wares  in  his  own  shop,  on  the  town  market,  or  in  case  where 
of  a  very  few  wares63  on  the  streets  or  even  in  hostels   and  how 
or  inns.64    If  he  left  his  own  town,  he  went  to  near-by  chants 
markets  or  to  the  fairs  both  near  and  far.     Many  sold 
merchants  owned  their  ships  as  well  as  the  cargoes,  or 
at  least  part  of  the  cargoes.65     Sometimes  they  sailed 
with    the    ship    themselves;    sometimes    like    Shake- 
speare's Merchant  of  Venice  they  sent  an  agent  or 
supercargo.     While  traveling  by  land  in  England  the   1237 
merchants  ofAmiens  were  accustomed  to  ride  horse- 
back from  one  town  to  another.66 

The  ventures  of  a  merchant  of  the  ancient  world 
are  welt  illustrated  by  the  outline  that  Trimalchio   Trimal- 
gives  to  his  fellow  freedmen  in  or  near  Puteoli,  south-  chel£the 
ern  Italy.     "I  too  was  once  just  like  you,  but  by  my  chant 
ability  I've  come  to  this.     It's  brains  that  makes  the    ist  cen- 
man,  all  the  rest  is  trash.    I  buy  cheap  and  sell  dear;  turyA-D- 
others  may  have  different  ideas.     I'm  running  over 


142    INTRODUCTION  TO  ECONOMIC  HISTORY 

with  good  luck.  As  I  was  saying,  it's  my  careful 
management  that  has  brought  me  all  this  wealth.  I 
was  only  as  big  as  that  lamp  when  I  came  from  Asia, 
in  fact  I  used  to  measure  myself  by  it  every  day.  By 
heaven's  help  I  became  master  in  the  house,  and  then 
I  caught  the  fancy  of  my  fool  of  a  lord.  So  at  his 
death  he  made  me  co-legatee  with  the  Emperor  and  I 
got  a  senator's  fortune.  But  no  one  ever  has  enough. 
I  wanted  to  go  into  business.  To  cut  the  story  short, 
I  built  five  ships,  loaded  them  with  wine — it  was 
worth  its  weight  in  gold  then — and  sent  them  to 
Rome.  Every  ship  was  wrecked  just  as  though  I  had 
ordered  it;  that's  a  fact.  In  one  day  Neptune  swal- 
lowed up  thirty  million  sesterces.  Do  you  think  I 
lost  courage?  No,  by  heaven,  the  loss  only  whetted 
my  appetite  as  if  nothing  had  happened.  I  built  more 
ships,  larger,  better  and  luckier  ones,  so  that  no  one 
should  say  I  wasn't  a  man  of  courage.  You  know  a 
great  ship  has  great  strength  in  itself:  I  loaded  them 
with  wine  again,  pork,  beans,  perfumes,  and  slaves. 
Then  my  wife  did  a  respectable  thing;  she  sold  all 
her  jewelry  and  dresses  and  put  in  my  hand  a  hundred 
pieces  of  gold.  This  was  like  heaven  to  my  fortune. 
What  heaven  wishes  comes  quickly;  by  one  trip  I 
cleared  a  round  ten  million.  At  once  I  bought  back 
all  the  estates  that  had  belonged  to  my  master.  I 
built  a  house  and  traded  in  cattle;  everything  I 
touched  grew  like  a  honeycomb.  When  I  found  that 
I  had  more  than  all  the  citizens  of  the  town  put 
together  I  quit  the  counter  and  set  up  my  freedmen 
in  business  for  me.  Then  I  built  this  house.  As  you 
know,  it  was  once  a  hovel,  now  it's  fit  for  a  god.  It 
has  four  dining  rooms  upstairs,  my  own  bedroom,  this 
viper's  sitting  room,  a  very  fine  porter's  lodge,  and 
spare  rooms  for  guests.  Take  my  word  for  it,  if  you 


TOWN  ECONOMY 


143 


have  only  a  cent  you  are  valued  at  a  cent,  but  if  you've 
got  something  you'll  be  thought  worth  something. 
So  your  humble  servant  who  was  a  pauper  has  come 
to  be  a  prince."  67 

The  story  of  a  more  humble  merchant,  smacking 
of  medieval  superstition,  says  that  he  bought  the  arm 
of  St.  John  the  Baptist  from  a  woman  who  had  ob- 
tained it  dishonestly.  Building  a  house  and  shop  in 
his  home  town,  the  merchant  hid  the  arm  in  one  of 
the  supporting  pillars.  One  day  while  sitting  in  his 
shop,  he  was  informed  by  excited  citizens  that  the 
town  was  on  fire  and  that  the  fire  would  soon  be  near 
his  house.  He  cared  much  for  his  wares  but  feared 
no  fire  because  of  the  protection  of  the  holy  relic.68 
Judging  from  the  fact  that  the  arm  long  continued 
to  perform  miracles,  we  may  infer  that  the  mer- 
chant's house  really  escaped  the  fire. 

Andrew  Horn,  a  London  fishmonger  of  honest 
dealing,  became  Chamberlain  of  the  city  and  author 
of  learned  legal  treatises.69  The  chief  members  of 
the  Medici  family  of  Florence  were  merchants  until 
Lorenzo  the  Magnificent  turned  his  attention  wholly 
to  the  affairs  of  the  city,  investing  his  capital  in  land.70 
This  family  showed  clearly  that  merchants  could  be 
princes  quite  as  well  as  country  nobles  could,  and  that 
they  were  able  to  appreciate  the  works  of  art  of  their 
day  and  were  themselves  not  without  some  artistic 
creative  power. 

A  third  and  much  less  important  class  is  made  up 
of  hucksters  carrying  their  small  wares  from  street  to 
street  or  village  '.o  village,  without  any  fixed  place  of 
business.  Early  in  the  history  of  London  a  huck- 
stress  was  selling  cheese  and  butter.71  An  English- 
man called  "Godric"  peddled  small  wares  around  the 
villages  and  farm  houses  of  his  own  neighborhood. 


A  Dutch 
merchant, 
1 3th 
century 


A  London 
merchant 

Medici  of 
Florence 


Huck- 
sters 


Of 

Walpole, 
N7orfolk, 
about 


144    INTRODUCTION  TO  ECONOMIC  HISTORY 


Died 
1170 
1261 


Small 
masters 


Laboring 
class 


After  spending  four  years  in  such  work,  he  became  a 
merchant  associating  himself  with  town  merchants 
and  engaging  in  foreign  trade.  Sixteen  years  of  suc- 
cessful trade  found  him  turning  to  religion.  After 
a  pilgrimage  to  Jerusalem  and  two  to  Rome,  he 
entered  holy  service  where  he  remained  for  forty 
years  or  over,  apparently  finding  that  commerce  had 
poorly  prepared  him  for  the  life  of  a  saint.72  A  cen- 
tury later  in  Magdeburg,  Germany,  we  find  that  a 
huckster  caught  cheating,  Godric's  crime  (?),  was 
either  to  be  beaten  and  have  his  head  shaven,  or  to 
be  fined  three  shillings.73 

A  fourth  class  of  much  greater  importance  consists 
of  small  independent  masters,  whether  engaged  in 
trade  or  manufacture,  or  both.  Numerically  these 
were  important,  and  politically,  too,  for  they  were 
ambitious.  These  men  constituted  the  rank  and  file 
of  trade  and  manufacture,  and  were  the  backbone  of 
the  craft  gilds.  Their  great  economic  problem  was 
to  maintain  their  independence  against  the  encroach- 
ment of  the  rich  merchants.  Less  distinguished  indi- 
vidually than  the  merchants,  their  careers  are  but  little 
noted  in  history.  We  know  their  crafts — the  joiners, 
the  cappers,  the  bladesmiths,  the  taverners,  and  the 
cornmongers,  but  we  rarely  learn  about  them  indi- 
vidually, except  when  they  violate  some  town  ordi- 
nance. Their  wills  show  them  to  have  possessed  a 
tenement,  partly  shop  and  partly  residence,  a  few 
tools  and  household  goods. 

The  journeyman  or  laborer  constitutes  the  fifth 
class.  Both  merchants  and  handicraftsmen  employed 
men  to  help  them.  In  Greek  and  Italian  cities  of 
ancient  times  these  were  mostly  either  slaves  or  freed- 
men,  but  in  the  Middle  Ages  they  were  freemen  who 
had  passed  their  apprenticeship  but  had  not  yet  be- 


TOWN  ECONOMY  145 

come  masters.  As  time  went  on,  it  became  increas- 
ingly difficult  for  such  workmen  ever  to  become 
masters,  partly  because  of  the  increase  in  their  num- 
bers and  partly  because  of  gild  rules  that  prevented 
them  from  attaining  independence.  It  is  obvious  that 
such  a  position  of  permanent  subordination  would  be 
irksome.  The  discontent  frequently  showed  itself  in 
rioting  and  revolution.  It  is  on  such  occasions,  and 
when  one  of  them  steals  his  master's  goods,  or  other- 
wise violates  the  law,  that  we  hear  of  this  class. 

The  apprentices  forming  the  sixth  class  were  learn- 
ers who  for  a  few  years  served  their  masters  and  lived  Appren- 
with  them.     When  their  period  of  service  was  over,  * 
they  normally  became  journeymen  and  then  if  capable 
and  honest  they  became  masters. 

The  last  group  is  made  up  of  financiers  and  ad- 
ministrators, prominent  in  larger  towns  and  especially  Finan- 
in  a  great  political  center  like  Rome.  They  were  cie" 
almost  wholly  recruited  from  the  other  six  classes 
mentioned  above,  but  especially  from  the  merchant 
and  patrician  classes.  The  Greek  trapezitae  and  the 
Roman  argentarii  changed  money  on  the  market 
place,  received  it  on  deposit,  and  loaned  it  to  mer- 
chants or  others  at  interest.  In  the  Middle  Ages 
first  the  Jews  and  then  the  Lombards  performed  the 
same  services.  Such  monied  men  might  serve  the 
state  in  important  capacities,  loaning  it  money,  col- 
lecting its  taxes,  providing  food  during  a  scarcity, 
and  supplying  the  armies.  From  such  services  men 
made  great  gains.  The  Egibi  of  Babylon,  Antis-  Egibi, 
thenes,  Archestratos,  and  Pasion  of  Athens,  Atticus 
and  Crassus  of  Rome,  and  the  Alberti,  Bardi,  and 
Peruzzi  of  medieval  Florence  well  illustrate  this 
class.  One  of  these,  Atticus,  has  been  immortalized 
by  a  brief  but  comprehensive  biography  at  the  hands 


146    INTRODUCTION  TO  ECONOMIC  HISTORY 


Atticus, 
109-32 

B.C. 


Less  im- 
portant 
classes 


Class 
snob- 
bishness 

Middle- 
burg, 
Zealand, 
1271 

Late  nth 
century 

Marl- 
boro', 
Eng., 
c.  1209 


of  Cornelius  Nepos  and  by  his  own  correspondence 
with  Cicero.  Inheriting  wealth  from  his  father  and 
then  from  his  uncle,  Atticus  invested  it  in  lands  and 
tenements  and  loaned  to  individuals  and  institutions. 
He  was  actually  resident  in  Athens  to  which  he  loaned 
money  without  interest.  There  he  served  his  friend 
Cicero.  There  he  entertained  philosophers  and 
scholars.  He  avoided  public  office  and  the  political 
strife  of  his  day,  counting  among  his  friends  men  of 
opposing  parties.  Wise,  good-natured,  and  talented, 
he  lived  a  quiet,  simple,  and  rational  life  that  com- 
mends itself  to  many  of  us  to-day.  Into  the  warm 
glow  of  his  fireside  and  the  intellectual  atmosphere 
of  his  simple  household  with  its  well-trained  slaves, 
readers,  transcribers,  and  artisans,  many  a  weary  party 
leader  entered  with  a  feeling  of  rest  and  repose.74 

There  were  other  classes  of  persons  engaged  In 
business  but  they  were  of  less  importance.  The  pawn- 
brokers, notably  the  Jews  in  medieval  Europe,  plied 
their  trade  then  as  now.  There  were  also  household 
servants,  beggars,  lawyers,  scribes,  leeches,  and 
barber  surgeons. 

An  analysis  of  these  classes  enables  us  to  under- 
stand much  of  the  economic  and  constitutional  history 
of  towns  under  town  economy.  Noble  despised  mer- 
chant and  the  merchant  looked  upon  the  handicrafts- 
man as  a  "blue-nail,"  or  contaminated  individual. 
Cicero  regarded  the  artisan's  craft  as  sordid,  and 
both  Cicero  and  Plato  scorned  the  retail  trade.  Into 
some  medieval  gilds  no  handworker  was  admitted,75 
and  admission  to  others  was  made  difficult.  In  Va- 
lenciennes the  baker,  innkeeper,  tailor,  and  walker, 
had  to  pay  higher  admission  fees  to  join  a  particular 
gild.76  And  some  towns  kept  certain  craftsmen  from 
becoming  citizens.77 


TOWN  ECONOMY 


147 


But  this  scorn  of  one  trade  for  another,  causing 
as  it  did  much  heart-burning,  led  to  no  such  misfor- 
tunes as  did  the  political  strife  involved.  Towns 
have  been,  at  least  from  the  days  of  ancient  Greece, 
the  centers  of  political  turmoil.  The  constitutional 
history  of  both  Greece  and  Rome78  is  replete  with 
struggles  for  control.  In  this  respect  the  towns  of 
medieval  Europe  repeated  the  history  of  the  ancient 
world. 

The  factors  in  the  struggle  were  numerous.  There 
were  the  various  classes  already  mentioned.  There 
was  the  lord  of  the  town  in  the  Middle  Ages  and  the 
tyrant  in  the  ancient  world.  Aliens,  in  the  Middle 
Ages  the  Jews,  always  complicated  the  situation. 
And  outside  of  the  walls,  rural  nobles  and  tribal  or 
national  sovereigns  were  ready  to  make  alliance  with 
the  different  groups  within  the  town  for  their  own 
advantage.  Indeed,  at  times  there  seem  to  have  been 
wavelike  movements  in  which  one  town  influenced 
another,  and  in  which  town  and  country  were  obeying 
the  one  impulse — to  change  political  conditions  for 
the  benefit  of  some  class. 

Sometimes  the  struggle  was  for  control  of  the  ward 
or  division  of  the  town.  The  more  serious  move- 
ments, however,  were  more  ambitious,  for  the  mas- 
tery of  the  town  itself.  In  medieval  Florence,  long 
the  scene  of  factious  strife,  there  broke  out  a  memo- 
rable revolution,  the  influence  of  which  seemed  to 
spread  far  and  wide.  The  merchants  had  been  long 
in  the  saddle  in  Florence.  Their  rule  had  encountered 
many  enemies.  Among  these  were,  of  course,  many 
nobles  whom  they  had  robbed  of  power,  and  also  the 
laborers,  and  the  shiftless  always  ready  to  form  a 
mob  to  bring  about  a  change  which  could  not  hurt 
them  and  which  might  benefit  them.  But  most  im- 


Political 
struggles 


Chiefly 
1100-1500 


Factors 
in  po- 
litical 
struggles 


E.g., 

1342-58 
and  137? 
to  about 
1400 


E.g., 

Florence, 

London, 

Cologne, 

Ghent 

Florence, 
1378 


i48     INTRODUCTION  TO  ECONOMIC  HISTORY 

portant  of  all  were  the  handicraftsmen  who  were 
gradually  becoming  dependent  upon  the  merchants 
for  raw  materials  and  for  the  sale  of  the  finished 
goods.  The  merchants  found  their  strength  in  the 
seven  Greater  Gilds,  the  handicraftsmen  in  the  In- 
termediate and  the  Lesser  Gilds.  And  so  the  revo- 
lution broke  out.  At  first  the  lowest  element  was  in 
control,  but  soon  the  mob  gave  way  to  the  handi- 
Michele  craftsmen  under  their  able  leader,  a  wool  carder. 
After  about  three  years,  the  merchants  again  seized 
House  of  power,79  which  they  held  till  one  of  their  number  made 
himself  prince,  and  the  republic  of  Florence  dis- 
appeared. 

Flemish  In  the  Flemish  towns  many  struggles  took  place  to 
struggles  dispossess  some  ruling  oligarchy,  in  Valenciennes, 
isthand  Douai,  Liege,  Ghent,  and  other  towns.80  The  most 
turle"""  mteresting  °f  these  contests  occurred  in  Ghent  under 
1343-45  tne  leadership  of  James  van  Artevelde,  a  name  fa- 
mous in  medieval  history.  Artevelde  was  the  leader 
of  the  party  of  cloth  merchants  which  had  two  main 
aims.  One  was  to  dominate  the  cloth  industry  within 
Ghent — that  is,  to  control  the  finishing  of  cloth  and 
its  sale.  Opposed  to  them  were  the  fullers  who 
fought  to  prevent  themselves  from  becoming  the  mere 
employes  of  the  cloth  merchants.  The  other  policy 
was  to  maintain  friendship  with  England  whence  came 
English  wool  and  unfinished  cloth  to  be  fulled  and 
dyed  in  Ghent.  This  friendship  was  hard  to  main- 
tain when  war  broke  out  between  England  and  France, 
for  the  French  king  was  the  overlord  of  Flanders. 
The  upshot  of  it  all  was  the  formation  of  two  strong 
parties.  The  party  of  the  Claws  (the  claws  of  the 
lion  of  Flanders)  led  by  Artevelde  was  made  up  of 
the  cloth  merchants  in  league  with  their  fellows  of 
Bruges  and  Ypres,  and  was  supported  by  English 


TOWN  ECONOMY  149 

influence.     The   party    of    the    Lilies    (the    lily    of 
France),  led  by  the  count  of  Flanders,  was  supported 
by  France,  the  patricians  of  the  towns,  and  the  fullers 
and  lesser   crafts   of   Ghent.      It  was   essentially  a 
struggle    of    handicraftsmen    (fullers)     against    the 
cloth  merchants,  like  the  contest  in  Florence  already 
mentioned.    Artevelde,  able,  eloquent,  and  ambitious, 
after  many   successes,   was   finally   murdered.      His   J345 
place  was  later  taken  by  his  son  Philip  van  Artevelde 
who  succeeded  in  defeating  his  count  and  in  entering 
Bruges  victoriously,  but  was  himself  slain  in  battle.   Battle  of 
From  this  time  on,  reaction  set  in.    The  towns  were   13°g"  e  e> 
curbed  and  finally  stripped  of  all  local  independence. 
Democracy    (middle-class  democracy)    was   dead  in 
Flanders  (Belgium)   for  several  centuries. 

France,  too,  had  her  urban  strife.     Paris,  Rheims,   French 
Orleans,  Chalons,  Troyes,  and  Sens  were  in  turmoil  town 
at  the  very   time  when   the   second  Artevelde   was 
slain.     But  the  most  outstanding  event  in  this  con- 
nection belongs  to  a  generation  earlier.    The  Provost  Etienne 
of  the  Merchants  in  Paris,  led  the  popular  party  in  Marcel 
revolt  against  the  government  of  France,  a  govern- 
ment which  was  unable  to  keep  peace  at  home  or  to 
prevent   the   English    from   invading   its   territories. 
The  merchants  of  Paris  gained  control  not  only  of 
their  city  but  for  a  time  of  the  national  government 
as   well.     To  maintain  their  position,   their   leader 
looked  for  aid  from  England  and  from  the  peasantry  Jac- 
in  revolt.     Only  such  episodes  as  these  can  give  us  a 
clear  idea  of  the  power  and  ambition  of  the  towns- 
men of  the  day.     In  France  as  in  Flanders,  however, 
the  towns  lost  and  popular  government  had  to  wait 
till  the  French  Revolution,  when  it  rested  not  with 
the  merchants  but  with  the  mob.     From  France  and   1789-94 
Flanders,   discontent  spread  to  Germany  and  Eng- 


i5o    INTRODUCTION  TO  ECONOMIC  HISTORY 

E.g.,         land.    Sometimes  the  revolution  resulting  was  blood- 

Coiogne,     jess    sometimes  bitter  and  disastrous  both  for  life 

1396 

„     T        and  property. 

E.a.,Lon-          n.r          ,,  -11  r-ri          i 

don,  1381  Since  the  economic  development  or  London  has 
London  meant  more  to  the  modern  world  than  that  of  any 
institu-  other  medieval  city,  we  may  well  briefly  consider 

tions  .   .        .       /         .  J  ,  .  T 

events  and  institutions  important  in  its  history,  in 
the  nth  century,  London  seems  to  have  had  a  folk- 
moot  or  popular  assembly.  In  the  following  century 
it  became  a  commune  and  elected  its  own  mayor.  In. 
Espe-  the  next  century  the  merchants  supplanted  the  landed 
Uy^  noble  or  patrician  class.  And  in  the  I4th  and  ijth 
centuries,  one  trade  struggled  against  another  for 
economic  position  and  to  a  less  extent  for  political 
power.  And  there  were  enacted  in  London  scenes 
similar  to  those  of  Florence,  Paris,  Ghent,  and  other 
Continental  cities.  Among  the  many  contests  in 
London  was  one  between  the  victualing  trades  led  by 
the  fishmongers  on  the  one  hand  and  the  other  crafts 
of  the  city  on  the  other  hand.  The  former  sought  to 
maintain  a  monopoly  as  against  all  outsiders,  to  pre- 
vent them  from  selling  provisions  through  other  chan- 
nels than  the  victualers.  The  victualers  enlisted  the 
aid  of  the  king;  the  non-victualers  of  the  parliament. 
This  was  at  the  time  when  king  and  parliament  were 
in  conflict.  At  this  period  the  peasants  rose  against 
their  lords  who  were  dominant  in  parliament.  Hence 
the  alliance  came  to  be  king,  victualers  and  peasants 
against  the  other  crafts  in  London,  the  parliament, 
and  the  lords.  When  the  revolt  broke  out  among 
«I  the  peasantry  near  London,  the  victualers  (some  of 
the  fishmongers)  opened  the  gates  to  the  angry 
peasants  who  proceeded  to  burn  and  slaughter 
their  enemies,  and  incidentally  some  of  those  of  the 
victualers.81 


TOWN  ECONOMY 


151 


It  was  in  London  that  the  bicameral  system  of 
government  was  developed,  which  more  than  any 
other  has  influenced  our  later  municipal  organiza- 
tion and  terminology.  The  essentials  of  this  govern- 
ment were  and  still  are  a  mayor,  a  court  of  aldermen, 
and  a  common  council.  The  court  of  aldermen  is  a 
small  body  whose  members  have  judicial  power,  stand 
very  close  to  the  administration  of  affairs,  and  are 
vested  with  the  power  of  electing  the  mayor.  At 
one  time  patrician,  the  aldermen  came  to  be  mer- 
chants from  the  chief  trades  of  the  city.  The  common 
council  was  a  larger  body,  including  in  its  member- 
ship the  aldermen  themselves.  It  takes  the  place  of 
the  ancient  folkmoot,  constituting  the  most  popular 
part  of  the  political  machinery.  It  has  long  been  in 
the  hands  of  merchants  and  manufacturers  and  for 
a  time  was  elected  by  the  gilds  rather  than  the  wards. 

Taking  the  broad  view  of  political  development, 
we  see  in  both  the  ancient  and  medieval  world  four 
principal  stages.  At  the  beginning  there  was  a  gov- 
ernment made  up  of  citizens  or  freemen.  In  the 
second  stage  a  patrician  class  gained  control.  In  the 
third  the  merchants  were  in  power,  struggling  to  hold 
their  own  against  the  handicraftsmen  class.82  Many 
towns  never  got  beyond  this  third  stage  during  the 
continuance  of  town  economy.  In  some  towns  of  the 
ancient  and  medieval  world,  there  was  a  fourth  stage 
in  which  a  tyrant  or  prince  seized  power  from  the 
merchants.  Florence  is  an  outstanding  example  in 
the  Middle  Ages. 

The  political  struggles  were  not  for  the  vanity  of 
power.  The  parties  that  sought  control  of  the  gov- 
ernment had  ulterior  economic  aims  in  mind,  as  al- 
ways, and  notably  in  our  day  in  the  2Oth  century  when 
socialists  seek  power  for  economic  gain.  The  ad- 


Govern- 
ment of 
London 


i4th 
century 


Stages  of 
political 
devel- 
opment 


Economic 
basis  of 
struggles 


152     INTRODUCTION  TO  ECONOMIC  HISTORY 

vantage  to  those  living  in  the  town  came  through 
town  ordinances  which  might  be  made  now  in  favor 
of  this  class  of  producers  and  now  in  favor  of  that, 
at  one  time  giving  the  London  fishmongers  monopoly 
of  their  trade  and  at  another  taking  it  away,  granting 
strangers  privileges  and  again  taking  them  away,  now 
entrusting  the  gilds  with  the  right  to  supervise  their 
crafts  and  again  taking  away  that  right. 

We  may  consider  three  types  of  regulation.     The 

General     first  is  the  simple  law  applying  generally  to  the  town, 

regu°™1C    ^or  example>  that  weights  and  measures  should  be 

tions  uniform,  that  wares  should  be  as  good  at  the  bottom 
as  at  the  top  of  the  package,  and  that  vehicles  should 
not  be  driven  fast  through  the  streets  which  were 
generally  crooked  and  narrow.  Rules  of  this  kind 
are  found  in  plenty  from  the  days  of  ancient  Athens83 
to  medieval  Florence  and  London.84  In  medieval 
towns  the  most  outstanding  body  of  rules  of  a  general 
character  gave  to  citizens  of  the  town  advantages 
over  outsiders.  Citizens  were  free  from  tolls  on 
goods  brought  into  the  town  or  taken  outside;  they 
alone  could  keep  stores  or  shops;  often  they  alone 
could  sell  by  retail  (except  in  the  case  of  certain 
foodstuffs),  and  often  they  alone  could  buy  wares 

Stadt-  from  an  outsider.85  Regulations  frequently  embodied 
in  many  medieval  charters  prohibited  anyone  from 
holding  a  market  within  so  many  miles  of  the  town 

strassen-  walls,  compelled  all  goods  transported  in  the  district 
to  go  to  a  certain  town,  and  forced  merchants  carry- 

Nieder-  ing  wares  through  the  town  to  unload  and  expose 
their  wares  for  sale  to  the  citizens. 

The  second  class  is  made  up  of  regulations  passed 
-      ky  the  craft  gilds  and  accepted  by  the  town  as  bind- 

tions  ing  upon  all  within  the  trade.86  The  regulations  of 
the  medieval  craft  gilds  compelled  all  within  the  trade 


TOWN  ECONOMY  153 

to  belong  to  the  gild,  to  serve  a  certain  apprenticeship, 
to  stop  work  on  Sundays  and  very  holy  days,  and  to 
produce  wares  that  would  meet  the  standard  of  the 
gild  authorities.  There  can  be  little  question  that 
the  key  to  gild  regulation  is  the  advantage  of  the 
producer,  to  give  him  the  highest  return  for  the 
smallest  amount  of  effort.  This  led  to  artificial  stand- 
ards as  to  what  a  product  should  be,  for  instance, 
that  only  one  kind  of  leather  should  be  put  into  a 
shoe.  But  on  the  other  hand  the  craftsmanship  of 
the  artisan  led  him  to  produce  goods  of  high  excel- 
lence which  served  the  consumer  well,  if  he  could 
afford  to  buy  them.  In  some  cases  this  regulation 
was  necessary.  The  town  authorities  could  not  them- 
selves inspect  the  work  of  goldsmiths  to  determine 
whether  base  metals  had  been  used.  It  was  at  times 
almost  necessary,  in  lieu  of  a  corps  of  civil  servants, 
to  entrust  the  craft  gilds  with  power. 

The  third  class  of  regulation  has  to  do  with  food.  Food 
Cities,  such  as  Athens,  that  were  generally  liberal  in 
their  regulations,  could  not  afford  to  be  so  in  the  case 
of  trades  that  had  to  do  with  provisions.87  The  town 
had  to  have  food  in  sufficient  quantity  and  to  have  it 
at  a  price  within  the  reach  of  all.  It  might  either 
provide  foodstuffs  itself,  necessities  such  as  grain, 
fat,  salt,  and  oil,  as  did  Rome  from  the  2d  century 
onward,  or  it  might  leave  the  work  to  private  deal- 
ers, seeing  to  it  that  they  did  not  charge  too  much 
in  years  of  scarcity.  A  notable  illustration  of  this  is 
found  in  the  corn  trade  regulations  of  medieval  Lon- 
don. Peasants  were  invited  to  sell  their  grain  upon 
the  market  places,  during  the  early  part  of  the  day 
to  consumers  only,  and  later  to  the  grain  shopkeep- 
ers. Cornmongers  were  allowed  freely  to  go  out 
into  the  country  to  buy  grain,  provided  they  did  not 


154    INTRODUCTION  TO  ECONOMIC  HISTORY 

buy  any  already  on  the  way  to  market  and  provided 
they  did  not  buy  up  the  whole  supply  of  the  new 
crop  still  growing  in  the  fields.  And  finally,  corn 
merchants  might  purchase  grain  in  the  distant  towns 
for  sale  to  consumers  first  and  to  grain  shopkeepers 
afterwards.  It  was  always  to  be  possible  for  a  con- 
sumer to  buy  direct  from  the  one  who  brought  the 
grain  to  town.  Middlemen  were  welcomed  so  long 
as  they  transported  the  grain,  but  if  they  merely  held 
it  over  from  one  time  to  another  their  services  were 
not  appreciated.88 

Regulating  the   price   of   foodstuffs   comes   under 

Bread        the  third  class  of  regulation.     Keeping  the  assize  (or 

and  ale  law)  of  bread  and  ale  was  an  important  public  func- 
tion, not  often,  if  ever,  entrusted  to  the  bakers  or 
the  brewers.  When  grain  was  low  in  price  the  pound 
of  bread  and  the  gallon  of  ale  had  to  be  sold  cheaply. 
When  grain  was  higher,  bread  and  ale  might  be 
higher. 

Narrow  as  the  town  often  was  in  its  outlook,  and 

Leagues  restricted  as  were  its  regulations,  it  frequently  joined 
another  town  to  establish  some  measure  of  free  trade 
or  to  take  some  action  for  common  advantage.  We 
have  already  noted  the  Flemish  Hanse  of  London  and 
the  Hanseatic  League.  Lesser  alliances  were  formed 
in  Spain,  England,  Flanders,  France,  and  elsewhere. 
Had  it  not  been  for  the  power  of  territorial  princes 
and  national  feeling,  these  leagues  might  have  devel- 
oped into  something  of  permanence,  just  as  the  Athe- 
nian League  became  the  Athenian  Empire. 

Although    towns     everywhere    performed    similar 

Varia-  functions  in  the  stage  of  town  ecenomy,  we  must  not 
think  of  them  as  all  cast  in  exactly  the  same  mold, 
at  all  times  or  at  any  one  time.  The  climate,  new- 
ness of  the  civilization,  location  near  water  transpor- 


towns 


TOWN  ECONOMY  155 

tation,  and  so  on,  all  had  their  influence.  And  yet 
they  were  all  towns,  normally  commercial  at  first, 
then  adding  industry  to  their  activity  at  the  same 
time  as  they  extended  their  commerce. 

Those  who  settled  America  came  from  parts  of 
Europe  where  town  economy  prevailed,  or  at  least  Towns  in 
where  the  town  was  still  prominent.  And  so  while 
agricultural  villages  may  have  been  established  to 
meet  temporary  needs,  they  soon  developed  into 
towns.  And  while  at  first  blush  we  may  think  of 
those  who  settled  beyond  the  Alleghanies  as  estab- 
lishing independent  domestic  economy,  we  discover  on 
second  thought  that  their  independence  was  in  nearly 
all  cases  shortlived  or  really  non-existent,  for  some- 
where near  the  settler  there  grew  up  a  town  on  which 
his  dependence  was  great  and  lasting.  And  these 
towns  on  examination  prove  to  bear  a  strong  resem- 
blance not  only  in  their  general  economic  functions 
but  in  their  market  regulations,  to  the  towns  of  the 
Old  World.  Boston,89  Philadelphia,90  New  York,91  i7th  and 
and  other  towns,  had  medieval  ideas  of  trade,  but 
none  of  them  had  a  gild  system,  though  a  few  craft 
gilds  did  exist,  notably  in  Boston  and  Philadelphia. 
Before  America  was  settled,  walls  were  proving  of 
little  use  in  the  Old  World  and  in  the  New  World 
there  were  few  formidable  enemies  to  keep  out.  Nev- 
ertheless, Wall  Street  is  a  memorial  to  the  fact  that 
some  fortification  was  necessary.  Before  America 
had  a  national  trade  policy,  her  towns  had  commer- 
cial regulations.  And  before  national  trade  unions 
developed,  there  were  town  unions.92  But  above  all 
in  early  American  towns  the  market  was  local.  Towns 
exchanged  with  the  surrounding  district  and  with 
near-by  towns.  Lexington  (Kentucky)  bore  the  same 
relation  to  its  district  one  hundred  years  ago  as  Bev- 


156    INTRODUCTION  TO  ECONOMIC  HISTORY 

erley  (England)  did  to  its  district  four  hundred  years 
earlier,  and  each  traded  with  near-by  towns  for  goods 
it  could  not  itself  produce.  And  before  the  metro- 
politan centers  began  to  exert  their  influence,  rail- 
roads were  planned  and  constructed  locally.  No  bet- 
1830-60  ter  illustration  of  this  could  be  found  than  in  central 
New  York  State  where  purely  local  systems  of  rail- 
roads were  built  around  certain  towns,  such  as  Roch- 
ester and  Syracuse,  to  promote  local  trade  with  the 
rich  rural  sections.  Later,  these  systems  became  mere 
links  in  the  big  trunk  lines  connecting  metropolitan 
markets,  a  matter  which  belongs  to  a  later  stage. 

32.  THE  RURAL  PART  OF  TOWN  ECONOMY.  Al- 
though the  town  is  the  determining  factor  in  town 
economy,  there  is  nevertheless  the  counterpart  of  the 
town,  the  countryside,  as  much  an  integral  part  of 
town  economy  as  the  town  itself.  Just  as  the  village 
nucleus  was  dependent  upon  the  fields,  and  the  fields 
upon  the  nucleus,  so  was  the  town  dependent  on  the 
country  and  the  country  on  the  town. 

In  the  first  phase  of  town  economy,  as  we  have 
Town        seen,  the  town  was  prepared  to  furnish  the  country- 
country      s^e  w*tn  suck  raw  materials  as  the  country  needed, 
exchange    or  with  manufactured  goods  and  food  procured  from 
other  districts.     The  country  was  ready  to  furnish 
the  town  with  raw  materials  (wool,  flax,  hides,  lum- 
ber) and  a  few  manufactured  wares  (charcoal,  yarn) 
and  food  (wine,  olive  oil,  cheese,  butter,  beer)  of  its 
own    production.     In    the    second    phase    the    town 
came   forth  with   a   new  service.     It  was  ready  to 
supply  the  countryside  with  numerous  manufactures, 
goods  produced  partly  with  a  view  to  the  needs  of  the 
country  people.     At  the  same  time   the  town  itself 
was  looking  farther  and  farther  afield  for  new  wares. 
But  the   development  in  manufacture   during  the 


TOWN  ECONOMY  157 

second  phase  was  not  wholly  confined  to  the  town 
itself.  Here  and  there  cloth  was  being  made  in  the  Rural 
country  for  sale  to  townsmen.  The  many  kinds  of 
cloth  bearing  the  names  of  the  villages  (Stamford, 
Kersey,  Worstead)  in  which  they  were  first  made, 
is  ample  testimony  of  the  origin  of  a  large  part  of 
the  cloth  industry.  There  were  arising  merchants 
who  were  specially  anxious  to  develop  this  country 
manufacture — they  were  ready  to  buy  country  wares 
to  be  taken  to  the  nearest  town  or  port  for  shipment 
and  sale  to  some  distant  place.  A  good  illustration 
of  this  merchant  is  the  draper,  or  cloth  merchant. 
He  sought  not  only  to  buy  up  the  wares  of  country 
weavers  but  also  of  town  weavers.  His  activities 
were  hateful  to  the  craft  gilds,  which  were  opposed 
both  to  the  purchase  of  rival  country  products  and  to 
the  position  of  dominance  that  the  draper  was  gaining 
over  the  weavers  and  other  cloth  workers  in  the  town. 
Accordingly,  there  arose  two  parties  in  the  towns : 
the  party  of  old-time  gild  restriction  and  the  party 
of  "free  trade,"  which  believed  in  allowing  people  to 
deal  where  best  they  might,  especially  in  the  matter 
of  country  goods. 

But  the  party  of  restriction  or  monopoly  was  deeply 
entrenched  in  the  town  and  held  its  ground  so  well 
that  in  many  districts  in  medieval  Europe,  the  drapers  Town 
found  it  necessary  to  induce  small  industrial  masters,  moves^ 
such  as  weavers,  dyers,  and  fullers  to  go  to  the  coun-  country- 
try,   or  they  provided  special  instruction   for  those 
already  there,  much  to  the  disgust  of  the  townsmen. 
In  the  second  phase  of  town  economy,   then,  there 
arose  a  rivalry  between  town  and  country  in  the  manu- 
facture of  certain  wares.     In  some  places  the  town 
won;   in  others  the  country.93 

This  rivalry  between  town  and  country  is,  however, 


Interde- 
pendence 
of  town 
and 
country 


Group  of 
manors, 
1 2th,  1 3th, 
and  i4th 
centuries 


more  apparent  than  real.  It  was  in  fact  between 
the  craft  gild  monopolists  working  in  the  town  and 
the  townsmen  organizing  rural  manufactures.  The 
town  drapers  and  the  country  weavers  were  closely 
dependent,  one  on  the  other.  It  is  not  rivalry  so 
much  as  interdependence  that  explains  the  relation- 
ship of  town  and  country.  This  is  seen  likewise  in 
the  close  relations,  military,  social,  and  economic, 
between  ancient  villas  and  medieval  manors  on  the 
one  hand  and  the  towns  on  the  other.  In  England 
there  were  contributory  manors  around  about  certain 
towns  (probably  originally  urban  villages),  that 
owned  houses  within  the  towns  and  were  responsible 
for  the  repair  of  the  town  walls.  An  example  of  this 
is  seen  on  the  accompanying  map.  The  owners  of 
villas  came  to  towns,  especially  to  capital  towns,  for 
social  life  and  to  make  their  more  important  pur- 
chases. Townsmen  bought  estates  in  the  country  for 
prestige,  to  have  places  for  quiet  retirement,  and  for 
supplies  and  income. 

It  is  to  be  expected  that  a  relationship  so  close 
would  be  carefully  organized  by  those  to  whom  it 
meant  so  much.  And  this  is  just  what  we  find,  worked 
out,  for  instance,  by  many  a  group  of  manors.  Let 
us  consider  the  group  of  manors  possessed  by  one 
person  or  one  organization,  say  in  England.  Some- 
times a  monastery  or  cathedral  chapter  of  canons 
possessed  from  a  dozen  to  several  scores  of  manors, 
usually  localized  in  one  district  but  by  no  means  con- 
tiguous. A  bishop  or  a  lay  lord,  such  as  a  baron 
or  an  earl,  likewise  possessed  a  manorial  group. 
For  the  monastery  and  cathedral  chapter  it  was  a 
necessity  and  for  the  episcopal  and  lay  lord  a  con- 
venience to  have  the  products  of  the  manors  sent  to 
some  one  place,  to  the  monastery,  the  cathedral  chap- 


TOWN  ECONOMY 


159 


SIX  ECCLESIASTICAL  MANORIAL 
GROUPS  AND  THEIR  TOWN  CEN- 
TERS  IN  MEDIEVAL  ENGLAND 


(about  13th  century) 
x  Durham  m.nore,  1183 
+  Ramsey  Humors.  |2iO 
O  St.  F.uT,  (London)  nunon. 
D  Gloucester  nunorj,  iea»-130S 
A  B.ttle  nutnors.  Ed.  I 

•  Winchester  rannort,   U0» 

•  Center  of  the  Grouo 


160    INTRODUCTION  TO  ECONOMIC  HISTORY 


Town 

and 

manor 

exchange 

goods 


ter,  to  the  bishop's  palace,  or  the  earl's  castle.  Regu- 
lar carrying  services  were  imposed  upon  the  villeins 
to  have  the  grain  and  other  products  sent  to  the  chosen 
place.  In  the  case  of  St.  Paul's  chapter,  London, 
grain  was  brought  in  large  quantities  every  week 
for  the  baking  of  bread  and  the  brewing  of  beer 
for  consumption  by  the  canons  resident  at  St.  Paul's. 
Likewise,  large  amounts  of  various  products  were 
sent  to  the  bishop  of  Winchester's  palace  in  the  town 
of  Winchester,  some  coming  from  near-by  manors, 
some  from  manors  located  at  a  distance.  Farther 
north  lay  the  monastery  of  Ramsey  to  which  man- 
orial products  were  regularly  sent  for  the  use  of  the 
monks.  And  so  in  many  other  instances,  rural  prod- 
uce was  sent  to  some  establishment  within  a  town 
for  the  use  of  the  owner. 

As  time  went  on,  the  same  organization  was  util- 
ized to  send  to  the  town  market  for  sale  a  consider- 
able variety  of  goods :  grain,  livestock,  poultry,  eggs, 
cheese,  butter,  beer,  ale,  and  hides.  These  goods 
were  transported  by  the  lord's  tenants  under  the 
supervision  of  his  bailiff.  The  bailiff  in  turn  pur- 
chased many  wares  in  the  town  for  use  on  the  manor: 
wine,  grindstones,  sacks,  carts,  iron  for  wheels  and 
plows,  nails,  and  kitchen  utensils.  Doubtless,  this 
exchange  took  place  because  it  was  found  that  the 
town  offered  a  more  continuous  demand  for  rural 
produce  than  village  (manorial)  markets  or  fairs, 
and  offered  a  greater  variety  of  wares  from  which  to 
make  purchases.  About  the  marketing  of  the  vil- 
lein's own  produce  we  have  little  information,  but 
there  is  every  reason  to  believe  that,  like  his  lord, 
he  took  advantage  of  the  town  market  to  dispose  of 
his  surplus  goods,  especially  grain  and  beer.94  If  one 
pictures  to  himself,  then,  the  long  and  frequent  pro- 


TOWN  ECONOMY 


161 


cessions  of  pack  horses  and  the  trains  of  creaking 
carts  making  their  way  to  town  markets,  he  gets  rid 
of  the  old  idea  that  the  manor  was  isolated  and  self- 
sufficing  and  at  the  same  time  he  appreciates  how 
closely  the  town  and  near-by  rural  communities  were 
connected  in  a  regular  and  orderly  marketing  system. 

Judging  from  the  existing  evidence  we  find  it  diffi- 
cult to  escape  the  conclusion  that  town  and  village 
were  closely  bound  together  in  economic  (and  there- 
fore social)  intercourse,  in  dependence  one  on  the 
other  for  goods  and  services.  In  the  second  phase 
of  town  economy  each  was  organized  to  supply  the 
other  with  raw  materials  and  manufactured  goods. 
The  town's  exclusive  contribution,  in  this  as  in  the 
first  phase,  was  to  perform  the  function  of  the  ex- 
change of  goods  and  to  supply  ideas  and  opportunity. 
The  country's  exclusive  contribution  was  to  supply 
recruits  for  the  town. 

33.       CULTURAL     ATTAINMENTS     OF     THE     TOWN. 

Probably  few  would  doubt  that  on  the  whole  the  town 
was  a  great  economic  success.  It  would  be  a  profit-  Economic 
able  exercise  to  make  a  list  of  all  the  different  ad-  tionsof"" 
vances  of  an  economic  character  that  one  can  identify  the  town 
with  the  town.  Prominent  among  these  would  be 
the  rise  of  classes  of  persons  specially  devoted  to 
commerce  and  to  manufacture  for  sale.  The  spe- 
cialization of  employment  was  carried  on  to  an  un- 
precedented extent  and  enabled  the  acre  of  ground  to 
support  many  more  persons  in  town  than  in  village 
economy.  Although  there  are  usable  estimates  of  the 
population  of  towns  in  the  period  of  town  economy, 
there  is  none  of  the  population  of  the  whole  town  mar- 
keting area.  A  conservative  guess,  however,  would 
be  that  the  fully  developed  town  economy  supported 
twice  as  many  people  per  acre  as  did  village  economy. 


162    INTRODUCTION  TO  ECONOMIC  HISTORY 

While  in  the  village  stage  property  consisted  chiefly 
Personal  jn  land,  in  the  town  stage,  there  was  a  large  class  of 
mtowns  persons  living  in  the  town  itself  whose  chief  posses- 
sions were  personal  property  from  which  they  derived 
almost  all  their  income.  This  personal  property  was 
to  be  found  not  only  in  their  houses  for  use  in  the 
form  of  furniture  and  clothing,  but  for  sale  in  shops 
and  stores.  It  consisted  of  wares  ready  for  immediate 
consumption  and  therefore  universally  sought  after. 
Gold  and  silver,  in  plate  and  specie,  were  the  power- 
ful lodestones  in  the  town's  possession.  With  these 
commodities  townsmen  bought  privileges  from  their 
lords,95  hired  armies  to  defend  them,  and  equipped 
fleets  to  protect  their  merchant  ships. 

Much  of  this  personal  property  went  to  endow 
Use  of  religious  houses,  build  churches,  and  establish  chari- 
ties. Much  of  it,  too,  was  used  to  pander  to  the 
luxurious  habits  of  its  possessors.  But  even  that 
luxury  went  to  build  up  a  high  form  of  civilization, 
especially  when  it  employed  architects  to  build  family 
palaces,  and  painters  and  sculptors  to  decorate  them. 
Within  these  palaces,  as  within  the  more  humble  resi- 
dences, was  found  a  'social  life  more  mollified  and 
much  more  to  our  present  taste  than  any  in  the  previ- 
ous stages.  It  may  be  true  that  the  essence  of  cour- 
tesy is  a  kind  heart,  but  certainly  the  ways  in  which 
kindness  and  consideration  can  be  shown  were  worked 
out  in  the  early  urban  centers.  We  recognize  this 
when  we  speak  of  social  polish  (politesse)  as  urban- 
ity (urbs,  town).  In  the  Middle  Ages  it  spread  from 
Italian  towns  to  the  north  and  west,  and  has  since 
moved  onward  with  town  development. 

Close  daily  association  led  to  the  polished  habits 
that  oil  the  machinery  of  social  intercourse.  It  also 
led  to  habits  of  sanitary  living  unknown  before.  The 


TOWN  ECONOMY  163 

settled  village  had  been  compelled  to  make  some  ad-  Urban 
justments,  but  the  towns  were  forced  to  take  radical 
measures.  Slaughtering  by  butchers  was  regulated, 
the  offal  being  carried  outside  the  town.  Filth  from 
the  houses  was  to  be  regularly  disposed  of.  Ancient 
Rome  had  a  worthy  system  of  sewage  disposal  which, 
however,  was  not  commonly  found  in  other  ancient 
cities,  at  least  not  so  well  developed.  Many  towns 
had  to  depend,  and  indeed  could  safely  depend,  on 
the  tides  carrying  the  refuse  away  twice  daily.  For 
nearly  450  years  Rome  relied  for  her  water  supply 
upon  the  Tiber,  springs,  and  wells.  Then  it  tapped 
more  distant  and  dependable  sources  by  means  of 
aqueducts.  Throughout  the  Middle  Ages,  London 
possessed  wells  not  only  within  the  walls  but  slightly 
to  the  north,  three  famous  for  their  pure  sparkling 
water,  Holywell,  Clerkenwell,  and  St.  Clements'  well. 
It  is  difficult  to  say  anything  definite  about  the  result 
of  water  pollution  in  the  towns.  Most  of  the  dread- 
ful diseases  that  swept  the  towns  seem  to  have  come  Plagues 
through  crowding  in  buildings  rather  than  through 
polluted  water  supply.  Smallpox,  the  Black  Death, 
and  other  plagues  not  now  to  be  satisfactorily  diag- 
nosed but  probably  largely  pulmonary,  levied  their 
heavy  toll  in  medieval  towns  only  to  return  again, 
till  one  wonders  what  would  have  become  of  the  town 
population,  had  it  not  been  constantly  replenished 
by  peasants  eager  to  seize  opportunities  for  wealth 
and  freedom  at  the  risk  of  health  and  life.  How 
clearly  the  townsmen  recognized  the  dangers  of  over- 
crowding is  seen  when  the  plagues  came  and  all  who 
could,  fled  to  the  hills  and  valleys  of  the  countryside. 
On  the  occasion  of  the  Black  Death,  the  exodus  was 
considerable.  From  Florence  several  ladies  and  gen- 
tlemen left  for  a  secluded  spot  and  for  ten  days  they 


1 64    INTRODUCTION  TO  ECONOMIC  HISTORY 

1348  told  tales  which  Boccaccio  has  "preserved"  for  us  in 
the  Decamerone,  tales  some  of  which  have  been  the 
delight  of  many  generations  and  the  basis  of  several 
modern  dramas. 

World-  With  the  closer  associations,  economic  and  social, 
came  a  spirit  of  worldliness  which  at  its  worst  was 
threatening  to  the  highest  traditions  of  humanity  but 
at  its  best  pointed  to  progress  which  subsequent  gen- 
erations have  not  failed  to  maintain.  On  the  one 
hand  there  was  sexual  immorality,  on  the  other  hand 
a  more  rational  religion.  Sexual  irregularity,  or  the 
breach  of  whatever  sex  rule  may  prevail,  is  a  con- 
tinuous human  failing.  The  town  was  unprecedented 
only  in  so  far  as  there  arose  a  class  of  women  who 
devoted  themselves  to  vice  and  a  class  of  men  who 
acted  as  panderers  or  brokers,  to  bring  the  man  to  the 
professional  courtesan.  In  other  words,  immorality 
was  commercialized.  The  destruction  of  Sodom  and 
Gomorrah,  two  worldly  cities,  seemed  to  the  ancient 
Hebrews  as  a  visitation  from  the  enraged  deity, 
though  probably  it  was  simply  a  disaster  due  to  vol- 
canic action  or  explosion  of  natural  gas  or  oil. 

Religion  has  from  the  first  been  largely  mystical 

Religion  and  emotional  and  in  the  town  was  not  divorced  from 
these  traits.  There  were,  however,  at  least  two 
changes  probably  universal.  Religion  became  more 
rational  and  more  progressive.  We  cannot  forget 
that  the  Apostles  sought  out  the  great  cities,  Antioch, 
Ephesus,  Corinth,  Rome,  and  Athens,  to  spread  the 
new  faith  of  Christ,  because  these  centers  were  ready 
for  new  things.  And  St.  Paul  on  the  Areopagus 
proclaimed  Christ  as  the  unknown  god  whom  the 
open-minded  Athenians  had  worshiped  but  had  not 
yet  discovered. 

But  greatest  of  all  the  attainments  of  town  economy 


TOWN  ECONOMY  165 

was  the  development  of  individualism.  This  had  Individ- 
existed  long  before  in  the  crude  form  of  self-preser- 
vation, but  now  in  the  town  it  meant  the  expression 
of  one's  own  self  and  the  living  of  one's  life  as  seemed 
best.  It  did  not  grow  up  with  the  town  but  in  it. 
It  was  found  not  so  much  in  the  early  as  in  the  late 
town.  It  is  true  that  townsmen  formed  gilds,  commer- 
cial,industrial,  social,  and  religious,  and  worked  out 
many  of  their  problems  in  this  way.  It  is  true  also 
that  these  gilds  sometimes  prevented  the  individual 
from  doing  the  things  that  his  self-interest  dictated, 
prevented  him  from  making  inferior  goods  for  sale 
to  unsuspecting  persons,  from  employing  low-priced 
apprentices  instead  of  higher-priced  journeymen,  from 
working  at  night  to  get  ahead  of  his  neighbor,  and 
from  pledging  certain  craftsmen  to  work  for  him  only, 
but  in  all  these  instances  while  the  interests  of  some  in- 
dividuals were  curbed,  those  of  others  were  furthered. 
The  peasant  who  liked  to  make  shoes  and  not  to 
plow,  the  one  who  preferred  weaving  cloth  to  tend-  Oppor- 
ing  sheep,  and  he  who  could  build  houses  better  than  *unities 
he  could  keep  manorial  accounts — these  could  go  to  antsflee- 
the  town  and  be  themselves.  The  peasant's  son,  for  ins  to 
example,  St.  Godric  already  mentioned,  could  satisfy 
his  desire  for  trade,  not  once  or  twice  a  week  on  the 
near-by  market  by  selling  the  products  of  the  soil, 
but  every  day  by  buying  and  selling  what  others  pro- 
duced. And  the  shepherd  lad — it  might  be  Giotto — 
could  exchange  for  the  occasional  scratching  of  the 
outline  of  a  sheep  upon  a  rock,  day  to  day  practice 
on  canvas  and  with  the  best  models  and  materials  at 
his  command,  and  the  stimulus  of  fellow  artists.  And 
the  readiest  singer  of  rural  ballads  could  find  in  the 
town  a  patron  who  would  support  and  encourage  him, 
some  Maecenas  or  some  Lorenzo  the  Magnificent. 


166    INTRODUCTION  TO  ECONOMIC  HISTORY 

The  origin  of  art  and  literature  lies  far  behind  the 

town,  but  it  was  there  that  art,  letters,  philosophy, 

history,  and  science  were  systematically  cultivated  in 

Urban       private  homes,  in  academies,  and  in  universities.     To 

art  and       te|[  fae  S(-Ory  of  these  would  be  to  write  the  history 

letters 

of  the  higher  human  attainments.  We  are  all  con- 
scious of  what  we  owe  to  Egyptian  towns,  to  Greek 
cities,  to  Rome,  to  medieval  Florence  and  Venice. 
The  perfection  of  writing,  the  compilation  of  treat- 
ises, such  as  town  histories,  the  collection  of  books 
and  works  of  art,  the  erection  of  fine  buildings,  such 
as  ancient  temples  or  medieval  churches,  halls  for 
rich  merchants,  and  palaces  for  private  citizens, 
belong  to  town  economy. 

But  there  is  one  art,  the  histrionic,  which  seems 
so  close  to  our  main  interest  that  we  are  compelled  to 
note  it.  In  medieval  towns  where  public  entertain- 
ments were  few,  the  gilds  presented  not  only  pag- 
Miracle  eants  but  plays.  There  were  the  miracle  plays  that 
plays  college  students  nowadays  are  required  so  painfully 
to  read,  plays  that  present  scenes  from  the  Bible. 
The  acting  was  slight,  the  posing  considerable.  How 
much  fun  there  was,  we  can  hardly  tell.  Perhaps 
some  gild  actor  occasionally  twisted  the  devil's  tail 
and  some  one  in  the  audience  made  sarcastic  remarks 
about  the  players.  Who  could  refrain  from  a  smile, 
if  not  a  jeer,  when  the  vintners  presented  the  feast 
at  which  the  water  was  turned  into  wine,  when  the 
tailors  held  the  cloth — as  thin  as  air — to  represent  a 
cloud  at  the  Ascension,  and  when  the  plumbers  and 
pattern  makers  showed  the  woman  taken  in  adultery? 
Such  as  the  plays  were,  they  interested  and  we  hope 
amused  the  people,  as  one  "castle,"  or  "float"  as  we 
should  say,  passed  from  street  corner  to  street 
corner.90 


TOWN  ECONOMY 


167 


6 


Most  of  the  authors  of  these  plays  are  unknown. 
One,  however,  was  famous  for  his  literary  output,  Hans 
more  famous  in  his  day  than  in  ours,  for  he  wrote 
rather  for  his  own  generation  than  for  ours.  This 
was  Hans  Sachs  the  shoemaker-poet  of  Niirnberg. 
Among  his  6000  works,  large  and  small,  were  over 
4000  mastersongs,  more  than  200  dramas  and  more 
than  1500  comic  stories,  fables,  and  the  like.  In  one 
he  pictures  a  peddler  who,  going  to  sleep  in  the  woods, 
has  his  wares  plundered  and  his  clothes  damaged  by 
apes.  The  peddler  dreams  of  a  village  festival  and 
the  great  profits  he  is  making.97  The  picture  is 
graphic,  typical  of  the  familiar  scenes  which  Sachs 
presented  so  well,  and  which  doubtless  appealed 
strongly  to  the  hearers  and  readers.  It  is  indeed  a 
striking  commentary  on  the  attainments  of  the  town 
when  shoemakers  could  leave  their  lapstones  and 
awls,  masons  their  trowels  and  morfar,  and  weavers 
their  looms,  to  spend  their  evenings  in  literary  and 
musical  efforts,  the  poorest  of  them  bad  enough  but 
the  best  worthy  of  presentation.  The  gilds  of  the 
mastersingers  are  no  less  distinctive  of  the  higher 
culture  of  the  town  than  are  the  gilds  of  merchants 
and  artisans  of  its  ordinary  economic  life. 

The  individualism  that  we  have  been  dealing  with 
showed  itself  further  in  the  breakdown  of  the  old-  Effect  of 
time  undivided  family.  How  far  it  had  gone  in  the 
country,  and  how  far  independently  of  the  town,  we  family 
cannot  say,  but  certainly  the  process  was  accelerated 
if  not  initiated,98  completed  if  not  commenced  in  the 
town.  The  patriarchal  group  was  based  on  land 
possession  and  land  cultivation.  It  could  continue, 
and  does  in  Russia,  even  though  towns  exist,  but  as 
town  life  and  influence  grow,  it  disappears.  The  large 
family  gives  way  to  the  small  when  the  individualism 


168     INTRODUCTION  TO  ECONOMIC  HISTORY 


Urban 
poor 


develops  that  makes  submission  to  an  elder  brother  an 
oppression,  when  opportunity  for  work  is  sufficient 
to  make  the  younger  brother  independent,  and  when 
associations  of  a  protective  character  exist  to  take 
the  place  of  the  larger  family,  associations  such  as 
the  gilds.  When  the  poor  trader  or  handicrafts- 
man died  in  the  Middle  Ages,  his  gild  marched  to 
his  grave,  buried  him,  paid  for  masses  for  his  soul, 
and  where  necessary  aided  his  widow. 

-  The  poor  existed  in  the  town,  especially  in  the  later 
phase  of  its  development.  When  the  town  was  young 
and  competition  not  so  keen,  when  little  capital  was 
required,  the  average  apprentice  became  a  journey- 
man, and  the  journeyman  a  master,  perhaps  never 
rich,  but  rarely  very  poor,  unless  through  physical  or 
mental  disease.  But  in  the  later  phase,  such  oppor- 
tunity was  partly  closed  through  the  rapid  growth 
of  population,  through  the  increase  in  the  amount  of 
capital  required  to  do  business,  and  through  gild 
restrictions  which  made  a  start  difficult.  Thus,  many 
remained  permanent  laborers  who  otherwise  might 
have  become  masters.  The  town,  then,  had  its  prole- 
tariat of  freemen,  men  who  were  legally  independent 
but  economically  dependent.  I  And  for  this  reason  in 
times  of  disturbance,  in  Florence,  Ghent,  and  Lon- 
don, it  was  to  be  expected  that  the  cry  would  be 
heard  to  dispossess  the  rich  and  to  redistribute  prop- 
erty. The  parallelism  between  our  day  and  that  is 
close.  The  radical  solution  of  socialism  was  as  much 
rooted  in  inequality  then  as  now;  the  inequality  was 
as  much  deserving  of  fundamental  solution,  and  the 
discontent  as  little  remedied  by  repression  as  now. 

The  gilds  might  care  for  their  poor,  but  there 
Charities  would  still  be  some  left  to  private  charity  and  to 
m  towns  monasteries  and  parishes.  The  town  itself  in  the 


TOWN  ECONOMY  169 

Middle  Ages  had  its  fund  for  loaning  to  the  deserv- 
ing poor,  and  its  machinery  for  caring  for  orphans, 
but  none  quite  rivaled  the  practice  of  Rome  in  selling 
grain  at  low  prices  and  later  even  giving  it  to  the 
poor.  It  is  hard  to  avoid  the  conclusion  that  such 
a  practice  helped  to  cause  Rome's  degeneration  and 
ultimate  fall. 

All  in  all,  town  civilization  was  the  highest  known 
up  to  date.     Indeed,  our  narrow  definition  of  civi-  Early 
lization  is  "the  culture  of  the  town."    We  have  gone  towns 
beyond  it  now,  so  that  the  modern  town  is  much  crit-  con- 
icised  for  its  materialism,  its  complacent  ignorance 
of  art  and  letters,  and  its  objective  attitude  to  life. 
But  the  town  of  town  economy  was  not  the  dependent 
community  of  to-day,  not  a  parasite  on  a  larger  center 
but  a  dominant  group  of  persons,  the  cynosure  of  all 
eyes  in  the  district. 

34.     OUTSTANDING    TOWNS.     So     far    we     have 
thought  of  towns  as  developing  from  one  phase  of 
economic  life  to  another  and  attaining  certain  cul- 
tural heights.     But  among  towns  as  elsewhere  there 
were    individual    cases    of    outstanding    attainment.   Corn- 
Some   towns   remained  largely   commercial   and   at-  mercial 
tained  fame  for  their  commerce  only,  towns  such  as 
Corinth,  Venice,  and  Liibeck.     Some  towns,  reaching 
full  maturity  in  the  second  phase,   were   noted   for 
both  their  trade  and  their  industry,  such  as  Ghent  Indus- 
and  Ypres.     Other  towns  found  their  greatest  use-  * 
fulness  to  be  not  their  economic  life  but  their  political 
and  administrative  work.     The  towering  example  of  Political 
this  is  Rome,  which  hardly  entered  the  second  phase 
of  economic  development,  but  which  became  the  mis- 
tress of  much  of  the  known  world.    A  few  towns  have   Cultural 
reached  enduring  fame  solely  through  their  high  cul- 
tural attainments,  such  as  Bologna  in  law  and  Mont- 


i;o    INTRODUCTION  TO  ECONOMIC  HISTORY 

pelier  in  medicine.  But  just  as  the  greatest  temple  or 
church  contains  the  grandest  architecture,  the  finest 
sculpture,  and  the  most  telling  pictures,  so  the  greatest 
towns  were  successes  in  commerce,  industry,  politics, 

Towns  of  and  higher  cultural  attainments.  Such  are  Athens, 
Alexandria,  Florence,  Paris,  and  London.  Their 

ments  early  history  is  that  of  the  town;  their  later  develop- 
ment attains,  or  at  least  promises,  something  far 
beyond.  Some  towns,  only  a  few,  became  metro- 
politan centers,  reducing  to  economic  subordination 
their  fellow  towns  which  formerly  had  been  peers 
among  peers,  not  all  of  exactly  the  same  measure  but 
substantially  equal.  The  latter  were  towns  of  the 
stage  of  town  economy,  still  to  remain  towns  in 
metropolitan  economy,  minor  satellites  not  major 
planets. 

35.     SUGGESTIONS  FOR  FURTHER  STUDY 

1.  Interpretations   of    town    economy   somewhat   different 
from  the  one  in  this  chapter  are  to  be  found  in  G.  Schmoller's 
Mercantile  System  (1884  f.,  ed.  by  Sir  W.  J.  Ashley,  1896), 
pp.  6-13,  and  in  Karl   Biicher's  Industrial  Evolution    (1893, 
trans,  by  S.  M.  Wickett,  1901),  pp.  114-133. 

2.  An  inexpensive  general  account  of  town  life  is  found  in 
E.  Benson's  Life  in  a  Medieval  City  illustrated  by  York  in  the 
XV th  Century   (Society  for  Promoting  Christian  Knowledge, 
1920). 

3.  For  medieval  London,  see  John  Stow's  Survey  of  London 
(1598,  and  ed.  by  C.  L.  Kingsford,  1908). 

4.  For  a  study  of   important  official   records  of  medieval 
London,  see  Memorials  of  London  and  London  Life   (period 
1276-1419,  ed.  by  H.  T.  Riley,  1868). 

5.  Brief  histories  of  many  towns  are  to  be  found  in  the 
•Encyclopedia  Britannica.     See  the  Index  volume   (nth  ed.), 

pp.    896-912.     Examples    are    Samarkand,    Cologne    (Koln), 
Florence,  and  Winchester. 


TOWN  ECONOMY  171 

6.  For  Greek  towns,  see  A.  E.  Zimmern's  Greek  Common- 
wealth:    Politics   and   Economics   in    Fifth    Century    Athens 
(1911);  W.  S.  Davis'  A  Day  in  Old  Athens:    A  Picture  of 
Athenian  Life  (1914)  ;  and  also  the  same  author's  forthcoming 
book,  A  Short  History  of  the  Near  East   (330  to  !Qi8  A.D.), 
for  example,  chap.  VI,  Christian  Constantinople  about  A.  D. 
1000. 

7.  For  Florence,  see  the  two  inexpensive  booklets  by  E.  A. 
Roper,  Select  Extracts  illustrating  Florentine  Life  (Society  for 
Promoting  Christian   Knowledge,    1920)  ;    and   the   romantic 
picture  of  life  and  culture  in  fifteenth  century  Florence  in 
George  Eliot's  Romola  (1863). 

8.  A  valuable  little  book  on  Anglo-Saxon  and  early  Eng- 
lish towns  is  The  Domesday  Boroughs  by  A.  Ballard   (1904). 
For  later  English  towns,  see  Mrs.  J.  R.  Green's  Town  Life  in 
the  Fifteenth  Century,  2  vols.  (1894). 

9.  Anyone  interested  in  the  early  history  of  town  studies 
might  well  look  at  Robert  Brady's  Historical  Treatise  of  Cities 
and  Burghs  or  Boroughs   (1711).     It  is  political  rather  than 
economic.     For  other  works,   see  C.  Gross'   Bibliography   of 
British  Municipal  History  (1897). 

10.  General    information    about    the    trade    of    medieval 
European  towns  is  to  be  found  in  Helen  Zimmern's  Hansa 
Towns  (1889,  1895).     See  also  the  article  by  E.  F.  Gay  on 
the  Hanseatic  League  in  the  Encyclopedia  Britannica.     For 
ninth  and  tenth  century  Scandinavian  towns,  see  chap.  XIV 
of  Social  Scandinavia  in  the  Viking  Age  (1920),  by  M.  W. 
Williams. 

11.  Study  the  early  history  of  the  towns  in  your  state  or 
district.     See  the  local  historical  treatises.     Read,  for  example, 
C.  W.  Dahlinger's  Pittsburgh,  a  Sketch  of  its  early  Social  Life 
(1916),   and  Johns  Hopkins   University  Studies  in  Historical 
and  Political  Science  (ed.  by  H.  B.  Adams),  vol.  IV,  (1886). 

12.  Why  did  village  economy  give  way  to  town  economy? 

13.  How  is  it  that  in  the  stage  of  town  economy  we  find 
villages  but  not  village  economy? 

14.  Study  the  maps  in  this  chapter,  for  example,  the  Map 
showing  the  Towns  and  Dependent  Villages. 


172       INTRODUCTION  TO  ECONOMIC  HISTORY 

15.  What  was  the  difference  between  an  urban  village  and 
an  (economic)  town? 

1 6.  Explain  why  town  economy  at  several  epochs  retro- 
graded into  village  economy. 

17.  Which  was  the  more  complex  society,  the  village  or  the 
town? 

1 8.  What  different  classes  of  persons  would  you  meet  in  a 
few  hours'  walk  in  an  ancient  or  medieval  town  ? 

19.  Picture  to  yourself  a  day  spent  in  a  medieval  town, 
visiting  an  inn,  a  saddler's  shop,  a  mercer's  store,  the  corn  mar- 
ket, the  town  hall,  a  gild  hall,  and  one  of  the  gates  at  dark. 

20.  Enumerate  and   describe  the  various  institutions  per- 
taining to  a  town  in  the  stage  of  town  economy.     In  what 
respects  did  a  medieval  differ  from  an  ancient   (a)   Greek  or 
(b)  Roman  town?     Consider   (inter  alia)  the  relation  of  the 
town  to  the  country. 

21.  How  did  the  citizens  of  medieval  London  get  the  fol- 
lowing:   (a)  drinking  water,   (b)  milk,   (c)  bread,   (d)  wine, 
(e)  education,  and  (f)  news  of  distant  happenings ? 

22.  What  advantages,  economic  and  cultural,  did  the  towns- 
man enjoy  that  the  villager  did  not  ? 

23.  Have  you  noted   any  jurisdictional    disputes   between 
present-day  workmen  organized  in  unions,  comparable  to  the 
disputes  between  medieval  masters  organized  in  craft  gilds? 
Are  the  causes  the  same? 

24.  Which  was  the  most  efficient  stage  up  to  and  including 
town  economy  from  the  standpoint  of  the  support  of  the  greatest 
number  of  persons  per  square  mile  ?     Consider  the  whole  town 
economic  unit  with  its  town  nucleus  and  tributary  villages. 

25.  Is  it  in  the  early  or  the  late  town  that  you  see  indi- 
vidualism the  better  developed?     Is  the  early  town  different 
from  the  manor  as  far  as  the  position  of  the  individual  is 
concerned  ? 

26.  What  is  the  connection  between  individualism  in  town 
business  on  the  one  hand,  and  the  development  of  the  arts  and 
sciences  on  the  other? 

27.  Is  it  true  to  say  that  the  town  has  contributed  more  to 
both  material  and  non-material  culture  than  any  previous  stage? 


TOWN  ECONOMY  173 

28.  Where  do  you  find  town  economy  prevailing  to-day? 
Consider  the  southern  part  of  the  United  States,  Latin  Amer- 
ica, Australia,  China,  India,  Russia. 

29.  In  what  respects  did  a  North  American  town,  of  about 
the  year  1800,  differ  from  an  English  town  of  about  the  year 
1400? 

30.  Compare   a   Russian   town   of   to-day   with  a   North 
German  town  of  the  1 4th  century. 

31.  Discover  as  many  outstanding  towns  under  town  econ- 
omy as  you  can.     Study  the  reasons  for  their  eminence.    Con- 
sider   Jerusalem,    Bagdad,    Constantinople,    Nanking,    Delhi, 
Salem,  Richmond  (Va.),  and  Lexington  (Ky.). 

32.  If  you  are  specially  interested  in  literature,  associate 
as  far  as  possible,  the  various  types  of  literary  production  with 
the  economic  stages.     Does  pastoral  (bucolic)  poetry  arise  out 
of  cultural  nomadism  and  georgic  out  of  village  economy,  or 
are  they  reactions  from  town  economy? 

For  a  further  study,  see  the  references  in  the  notes  below. 

36.     NOTES  TO  CHAPTER  IV 

1.  Cf.  W.  Varges,  Zur  Entstehung  der  deutschen  Stadt- 
verfassung,  in  Jahrbiicher  fiir   Nationalokonomie    und    Statis- 
tik,  vol.  LXI  (1893),  pp.  195  f. 

2.  Pirenne   (Belgian  Democracy,  1915,  pp.  13-14)  has  set 
forth,  not  for  the  first  time,  the  theory  that  the  castrum   (our 
administrative  or  urban  village)  has  added  to  it  the  portus  (or 
free  economic  element),  thereby  becoming  a  town. 

3.  See  for  example  the  charter  granted   to   St.  Omer  in 
1151.     A.  Giry,  Histoire  de  la  Ville  de  Saint-Omer  (1877), 
P.  378. 

4.  The  Slavic  towns  were  notably  lacking  in  manufactures. 

5.  Two  readily  accessible  accounts  of  town  economy  are  to 
be  found  in  G.  Schmoller's  Mercantile  System  (1884  f.,  1896), 
pp.  6-13;  and  K.  Biicher's  Industrial  Evolution  (1893,  iQOi), 
pp.  114-133.     Compare  the  scholarly  review  in  G.  von  Below 's 
Probleme  der  Wirtschaftsgeschichte  (1920),  pp.  202-257. 

6.  The   four  "towns"   of   Providence,    Portsmouth,    New- 
port, and  Warwick  in  the  period  1636-1647  were  independent 


174       INTRODUCTION  TO  ECONOMIC  HISTORY 

towns  within  the  British  Empire — that  is,  before  the  colony 
of  Rhode  Island  was  formed. 

7.  In  medieval  Spain  the  town  secured  political  or  admin- 
istrative control  over  near-by  villages.     R.  B.  Merriman,  The 
Rise  of  the  Spanish  Empire    (1918),   vol.   I,   pp.    187,   221 ; 
C.  E.  Chapman,  A  History  of  Spain  (1918),  pp.  62,  159,  168. 
In   medieval   England  there  seems   to  have  been   a   borough 
organization  involving  the  villages  round  about.     A.  Ballard, 
The  Domesday  Boroughs  (1904),  pp.  11-36. 

8.  Cf.  below,  chap.  IV,  p.  166. 

9.  The  ruins  of  the  site  of  Troy  indicate  that  nine  separate 
towns  have  existed  at  different  times. 

10.  Cf.  Ptolemy.     J.  M.  Kemble,  History  of  the  Saxons 
In  England  (1876),  vol.  II,  p.  266. 

11.  See  A.  G.  Keller's  Colonization  (1908),  pp.  36,  41,  51. 

12.  See  below,  chap.  IV,  p.  170. 

13.  Philo  Judaeus.     Library  of  Original  Sources   (1907), 
vol.  Ill,  p.  359. 

14.  W.  Fowler,  The  City  State  (1895),  p.  36. 

15.  On  this  subject  see  Ancient  Town  Planning  (1913)  by 
F.  Haverfield,  and  Mediaval  Town  Planning   (1917)   by  T. 
F.  Tout. 

1 6.  Because  of  the   fact  that  we  know  next  to  nothing 
about  the  economic  history  of   Mycenean    (or  earlier),   and 
relatively  little  about  that  of  early  Greek  and  Roman  towns, 
we  are  compelled  to  base  our  generalizations  chiefly  on  medieval 
urban   history,   comparing   and   checking   it   up   with   what   is 
known  of  the  earlier  development. 

The  accepted  view,  propounded  in  one  place  by  Adam  Smith 
(1776),  by  Karl  Biicher  (1893),  and  by  others,  is  that  the 
chief  function  of  the  town  was  to  manufacture  goods  for  the 
country.  This  hypothesis  is,  of  course,  contradicted  by  the  one 
in  the  text,  that  the  town  was  essentially  commercial  from  first 
to  last,  and  that  the  early  town  was  overwhelmingly  com- 
mercial. It  is,  of  course,  perfectly  true  that  ancient  temples 
and  medieval  monasteries  had  manufacturing  equipment  and 
that  they  were  making  most  of  the  goods  they  needed.  It  is 
likewise  true  that  towns  grew  up  around  such  religious  insti- 


TOWN  ECONOMY  175 

tutions,  but  it  by  no  means  follows  that  the  manufacturing  had 
anything  to  do  with  this  development,  except  in  so  far  as  it 
gave  rise  to  demand  for  raw  materials — as  in  all  the  villages. 
Such  manufacture  was  for  use,  not  at  all,  or  not  ordinarily, 
for  sale. 

In  considering  the  origin  of  towns  we  have  at  least  two  cases 
to  keep  in  mind.  One  is  the  very  first  town  in  a  community 
of  villages.  Such  a  town  had  no  models  and  traded  in  no 
wares  from  other  towns.  It  developed  at  least  five  thousand 
years  ago,  or  rather  they  developed,  for  there  is  no  reason  to 
think  that  such  a  growth  was  an  isolated  phenomenon.  About 
this  development  we  have  no  information  of  any  kind  what- 
ever. We  cannot  even  infer  that  such  a  town  arose  around  a 
temple.  About  the  other  class,  the  later  towns,  we  know  some- 
what more,  but  not  very  much  more.  By  later  towns  we  mean 
places  that  developed  after  similar  centers  were  already  in 
existence  elsewhere.  South  Russian  towns  arose  much  later 
than  Greek  and  Byzantine  towns  and  were  much  influenced  by 
them.  French  towns  arose  after  Italian  and  owed  much  to 
them.  After  ancient  Italian  towns  had  reached  their  height 
and  had  gone  sadly  into  decay,  the  little  French  community 
(for  example)  of  St.  Omer  began  to  emerge.  Probably  a 
village  in  648,  it  was  given  by  its  lay  owner  to  missionaries. 
Until  about  the  loth  century  it  was  doubtless  a  market  village. 
From  that  time  on  it  was  a  trading  town  whose  merchants 
trafficked  in  England  and  elsewhere.  In  1127  its  first  charter 
was  granted.  This  shows  the  existence  of  a  gild  merchant, 
which  may  have  included  handicraftsmen.  Even  the  regula- 
tions of  the  late  isth  century  show  but  little  evidence  of  manu- 
facture, apart  from  cloth. 

17.  V.  O.  Kluchevsky,  A  History  of  Russia  (trans,  by  C.  J. 
Hogarth,  1911),  vol.  I,  pp.  52,  53. 

1 8.  Bible.     Isaiah,  chap.  23;  8. 

19-     Cf.  H.  Pirenne,  Relvinn  Democracy  (1915),  p.  91. 

20.  See  the  remarkable  list  of  foreign  wares  imported  into 
Bruges  and  Flanders  generally,  about  1200,  in  Cartulaire  de 
I'Annenne  Estaple  de  Bruges  (ed.  by  L.  Gilliodts-van  Severen, 
1904),  vol.  I,  pp.  19-21. 


176       INTRODUCTION  TO  ECONOMIC  HISTORY 

21.  K.  Hegel,  Stddte  und  Gilden    (1891),  vol.  II,  pp. 
450-451. 

22.  O.  J.  Thatcher  and  E.  H.  McNeil,  A  Source  Book 
for  Medieval  History  (1905),  pp.  584-586. 

23.  See    Giry    and    Reville.      Emancipation    of   Medieval 
Towns  (ed.  by  E.  W.  Dow,  1907),  p.  13. 

24.  Obviously  the  word  "patrician"  is  here  used  in  a  gen- 
eral sense.     It  has  meant  different  things  at  different  times 
and  in  different  places,  and  at  different  times  in  the  same  place. 

25.  Cf.  K.  Hoffmeister,  Die  wirtschaftliche  Entwickelung 
Roms  (1899),  p.  13. 

26.  C.  Gross,  Gild  Merchant  (1890),  vol.  I,  pp.  183-188. 

27.  Probably  the  oldest  Venetian  patricians  were  the  pos- 
sessors of  near-by  landed  estates,  but  soon  their  ranks  were 
recruited  from  the  merchant  class.     To  a  remarkable  extent 
the   fortunes   of  patricians   and   merchants  were   identical  in 
Venice. 

28.  R.  Davidsohn,  Geschichte  von  Florenz,  vol.  II,  pt.  I 
(1908),  p.  611 ;  vol.  Ill  (1912),  p.  195. 

29.  Cf.  Machiavelli,  Florentine  History  (trans,  by  W.  K. 
Marriott.    Everyman's  Library,  1909),  pp.  66,  71. 

30.  We  must,  of  course,  be  careful  not  to  confuse  a  town 
•with  an  urban  village.    Perhaps  the  latter  is  in  question  in  The 
Laws  of  Manu    (ed.  Biihler,  VIII,  237,  p.  296),  which  says 
that  space  of  about  six  hundred  feet  is  to  be  reserved  on  all 
sides  of  a  village  and  "thrice  (that  space)  round  a  town." 

31.  M.  Bateson,  Records  of  Leicester,  vol.  I   (1899),  pp. 
xi-xii. 

32.  Beverley   Town  Documents.     Selden  Society   (ed.  by 
A.  F.  Leach,  1900),  p.  19. 

33.  Liber  Albus  (Rolls  Series),  vol.  I  (1859),  p.  270;  vol. 
Ill  (1862),  p.  88. 

34.  See  chap.  IV,  above,  p.  160. 

35.  As  time  went  on  the  victorious  Blacks   (chiefly  mer- 
chants) had  to  face  a  new  enemy  in  the  handicraft  and  artisan 
class,  but  all  this  belongs  to  the  later  history  of  the  town. 

36.  Cf.  W.   Sombart's  theory    (of  the  origin  of  modern 
capitalism),  that  urban  rents  were  turned  into  commerce.   Der 


TOWN  ECONOMY  177 

moderne  Kapitdismus  (3d  ed.,  1919),  vol.  I,  pt.  2,  pp.  645  f. 
Mommsen  held  that  the  wholesale  trade  of  Latium  was  in 
earliest  times  in  the  hands  of  landed  proprietors.  ( The  History 
of  Rome,  trans,  by  W.  P.  Dickson,  1891,  vol.  I,  pp.  269-270.) 

37.  Cf.  the  gebiirtigen  Leuten  of   Brussels  in   1235.     K. 
Hegel,  Stddte  und  Gilden  (1891),  vol.  II,  p.  208. 

38.  W.  King,  Chronicles  of  Three  Free  Cities  (1914),  pp. 
334-336. 

39.  A.  Giry,  Histoire  de  la  Ville  de  Saint-Omer  (1877), 
p.  276. 

40.  See,   for  example,   the  laws  of  St.  Omer,   Paris,   and 
London. 

41.  Shoemakers  in  Rome  were  so  well  established  in  the 
time  of   Numa    (700    (?)    B.C.),  that   they  possessed   a  gild. 
While,  according  to  Pliny,  the  craft  of  bakers  was  introduced 
only  in   171   B.C.     See  J.-P.  Waltzing,  Les  Corporations  Pro- 
fessionnelles  chez  les  Romains  (1896),  vol.  II,  p.  78. 

42.  This  is  the  orthodox  explanation  which  the  archaeo- 
logical researches  are  doing  a  little,  but  very  little,  to  modify. 

43.  For  the  multiplicity  of  wares  made  in  towns  (and  in 
the  country)    in  the   I4th  and   1 5th  centuries  see  The  Early 
English  Customs  System  (1918)  by  N.  S.  B.  Gras. 

44.  T.   Frank,  An  Economic  History    of  Rome    (1920), 
p.  1 80. 

45.  A.  Giry,  Histoire  de  la  Ville  de  Saint-Omer  (1877), 
PP.  339-340. 

46.  H.    T.    Riley,    Memorials    of    London     (1868),    pp. 
375-376. 

47.  Ibid.,  pp.  348-350. 

48.  Ibid.,  pp.  539-541- 

49.  H.  Pirenne,  Belgian  Democracy  (1915),  p.  2IO. 

50.  H.T.  Riley,  Memorials  of  London  (1868),  pp.  157-159. 

51.  Ibid.,  pp.  330-33L 

52.  Ibid.,  pp.  341-343. 

53.  J.   Hutton,   James  and  Philip   van   Arteveld    (1882), 
p.  178. 

54.  T.    Frank,   An   Economic  History    of  Rome    (1920), 
p.  187. 


178       INTRODUCTION  TO  ECONOMIC  HISTORY 

55.  Ibid.,  p.  175. 

56.  H.    T.    Riley,    Memorials    of   London    (1868),    pp. 
228-229. 

57.  R.  Ehrenberg,  Das  Zeitalter  der  Fit  goer  (1912),  vol. 

I,  PP.  193-194. 

58.  The  mercers  of   Paris  about    1300  were  also  manu- 
facturers of  small  wares,  especially  for  women.     Le  Livre  des 
Metiers  d'Etienne  Boileau  (1837),  PP«  192-194. 

59.  H.    T.    Riley,    Memorials    of    London    (1868),    pp. 
422-423. 

60.  See  J.  Tait,  Dictionary  of  National  Biography  (1898), 
s.  v.  Richard  Whittington. 

61.  See  above,  p.  128. 

62.  R.  Ehrenberg,  Das  Zeitalter  der  Fugger  (1912),  vol. 

I,  PP.  85  f. 

63.  H.  T.  Riley,  Memorials  of  London   (1868),  pp.  153- 
154.    Skinners  might  sell  old  furs  on  the  streets  (1327). 

64.  H.  T.  Riley,  Memorials  of  London    (1868),  p.  360. 
Pouchmakers  (1371). 

65.  Cf.  T.  Frank,  An  Economic  History  of  Rome  (1920), 

P.  244. 

66.  Liber  Albus,  vol.  Ill   (1862),  pp.  169-170. 

67.  T.   Frank,  An   Economic  History   of  Rome    (1920), 
pp.   264-265.      Cf.  the  translation,    Trimalchio's  Dinner,  by 
H.  T.  Peck  (1898),  pp.  178-183. 

68.  Caesar    of    Heisterbach,     Translations    and    Reprints, 
University  of  Pennsylvania,  vol.  II   (1902),  no.  4,  pp.  12-13. 

69.  H.  T.  Riley,  Memorials  of  London  (1868),  p.  1 1 6. 

70.  Machiavelli,    Florentine   History    (trans,   by   W.    K. 
Marriott,  1909),  p.  358. 

71.  N.  S.   B.  Gras,   The  Early  English   Customs  System 
(1918),  p.  155. 

72.  Life  of   St.   Godric.      G.   G.  Coulton,  Social  Life  in 
Britain  (1918),  pp.  416-420. 

73-     O.  J.  Thatcher  and  McNeil,  A  Source  Book  of  Medi- 
eval History    (1905),   p.  593. 

74.  C.  Nepos,  Atticus  (trans,  by  J.  S.  Watson,  1902). 

75.  K.  Hegel,  Stadte  und  Gilden   (1891),  vol.  II,  p.  262. 


TOWN  ECONOMY  179 

76.  Ibid.,  p.  151. 

77.  Beverley    Town  Documents,  Selden   Society    (ed.   by 
A.  F.  Leach,  1900),  p.  134. 

78.  For  the  part  of  the  crafts  in  the  conspiracy  of  Catiline 
see  J.-P.  Waltzing,  Les  Corporations  Professionnelles  chez  les 
Romains  (1895),  vol.  I,  pp.  119-120. 

79.  Machiavelli,    Florentine   History    (trans,    by   W.   K. 
Marriott,  1909),  pp.  95  f. 

80.  See  H.  Pirenne,  Belgian  Democracy  (1915),  pp.  130  f. 

81.  G.    Unwin,    The    Gilds   and    Companies    of    London 
(1908),  pp.  41,  143;  C.  W.  C.  Oman,  The  Great  Revolt  of 
1381   (1906),  pp.  51,  56;  E.  Lipson,  An  Introduction  to  the 
Economic  History  of  England  (1915),  pp.  338,  454-455. 

82.  Venice  is  one  of  the  few  important  towns  which,  be- 
coming overwhelmingly  commercial,  had  no  considerable  artisan 
conflicts. 

83.  Aristotle  on  the  Athenian  Constitution   (ed.  by  F.  G. 
Kenyon),  §§50,  51,  pp.  93~94- 

84.  See  the  regulations  found  in  the  Letter  Books,  Liber 
Custurnarum,  and  Liber  Albus. 

85.  These  were  town  ideals  commonly  attained  and  main- 
tained, but  set  aside  by  strong  national  governments  in  favor 
of  other  communities,  or  in  the  general  interest.    Cf .  Sir  W.  J. 
Ashley,   An  Introduction   to   English   Economic  History  and 
Theory,  pt.  II  (1909),  pp.  13  f. 

86.  The  acceptance  was  at  times  reluctantly  made.  Ancient 
Greek  towns  and  ancient  Rome  delegated  few,  if  any,  powers 
to  the  guilds. 

87.  G.  Glotz,  Le  Travail  dans  la  Grece  Ancienne  (1920), 
P-  354- 

88.  See  N.  S.  B.  Gras,  The  Evolution  of  the  English  Corn 
Market   (1915),  pp.  157-199. 

89.  The  Memorial  History  of  Boston   (ed.  by  J.  Winsor, 
1881),  vol.  II,  p.  462. 

90.  P.  Kalm,  Travels  into  North  America  (1770),  vol.  I, 
P.  53- 

91.  Ibid.,  p.  258. 


i8o       INTRODUCTION  TO  ECONOMIC  HISTORY 

92.  J.  R.  Commons,  History  of  Labour  in  the  United  States 
(1918),  vol.  I,  p.  112. 

93.  It  is,  therefore,  apparent  that  the  view  of  some  scholars 
that  the  town  was  the  seat  of  industry  and  the  country  of 
agriculture  is  unsound  for  it  holds  true  of  neither  the  first  nor 
second  phase  of  town  economy,  though  it  is  truer  of  the  second 
than  of  the  first.     It  seems  to  be  based  on  observations  of  con- 
ditions existing  since  the  Industrial  Revolution. 

94.  See  Hall's  introduction  to  the  Pipe  Roll  of  the  Bishop- 
ric of  Winchester  (1903)  ;  N.  S.  B.  Gras,  The  Evolution  of 
the  English  Corn  Market   (1915),  pp.  17-31;  and  a  master's 
thesis  by   Mrs.   G.   T.   Droitcour,   University  of   Minnesota 
(1920).     Reference  is  made  in  the  text  to  the  manors  of  the 
period    1183-1350,    for  which  we  have   detailed   information. 
Earlier  manors  may,  or  may  not,  have  been  self-sufficing. 

95.  The  town  of  Huy  bought  a  charter  of  liberties  from 
its  lord,  the  bishop  of  Liege,  by  the  payment  of  one-third  of  its 
movables.     H.  Pirenne,  Belgian  Democracy  (1915),  pp.  61-62. 

96.  See  the  Beverley   Town  Documents.     Selden  Society 
(ed.  by  A.  F.  Leach,  1900),  pp.  37,  99. 

97.  W.  Scherer,  A  History  of  German  Literature  (trans, 
by  F.  C.  Conybeare,  1890),  vol.  I,  pp.  304-307. 

98.  The  early  migrations,  especially  by  sea.  may  have  ini- 
tiated the  decline  of  the  large  family  group.     See  B.  S.  Phill- 
potts,  Kindred  and  Clan  (1913),  pp.  261-265. 


CHAPTER  V 


METROPOLITAN   ECONOMY,    CHIEFLY   IN   ENGLAND 

37.  THE  ECONOMIC  METROPOLIS.  The  large 
town,  the  outstanding  town,  noted  in  the  last  chapter, 
slowly  grew  into  the  economic  metropolis.  Outwardly 
the  difference  between  the  metropolis  and  the  town 
was  chiefly  a  matter  of  size.  Sometimes  the  old 
walls  were  torn  down  and  new  ones  built  farther  out. 
Three  times  this  happened  in  Amsterdam.1  And 
everywhere,  generally  reluctantly,  the  people  had  to 
be  allowed  to  build  far  beyond  the  walls  whether  new 
or  old.  Old  buildings  within  the  walls  were  gradually 
replaced  by  new  ones.  Comprising  both  dwelling  and 
place  of  business,  the  two-story  structure  was  in- 
creased to  three,  becoming  not  only  higher  but  more 
convenient  and  luxurious.  The  number  of  market 
places  had  to  be  increased  and  more  room  had  to  be 
provided  for  storing  goods.  More  wheelbarrows, 
pack  mules,  carts,  wagons,  and  ships  entered  the 
metropolis  than  the  town.  And  business  bore  heavier 
risks  with  larger  gains  and  losses.  The  petty  trades- 
men of  town  economy  became  subordinated  to  the 
men  of  big  business  in  the  new  organization. 

London  as  a  town  probably  never  had  a  population 
of  more  than  50,000,  and  of  course  many  of  its  inhab- 
itants were  political  functionaries  and  their  servants. 
But  as  the  town  grew  into  a  metropolis,  the  popula- 
tion increased  to  more  than  200,000  within  a  century. 
By  1700  it  exceeded  half  a  million.  As  a  town,  Lon- 

181 


The  town 
becomes 
a  metrop- 
olis 


1200-1500 

London's 
popu- 
lation 

1500-1600 


i8a    INTRODUCTION  TO  ECONOMIC  HISTORY 


METROPOLITAN  ECONOMY— ENGLAND 


183 


don  had  contained  only  about  2  per  cent  of  the  total 
population  of  England.  By  1700  its  proportion  was 
about  10  per  cent.  In  the  2Oth  century  it  has  been 
about  20  per  cent. 

As  a  town  London  had  at  one  time  approximately 
17  per  cent  of  the  total  foreign  trade  of  England. 
Probably  its  share  of  foreign  trade  never  was  over 
45  per  cent,  which  is,  of  course,  a  very  large  propor- 
tion. But  when  the  town  became  a  metropolis,  the 
percentage  was  almost  doubled.2 

The  district  from  which  London  drew  its  supplies 
in  the  home  territory  was  increased  from  a  narrow 
circuit  of  but  twenty  to  fifty  miles  in  radius,  which 
had  been  sufficient  in  the  town  stage,  to  a  wide  area 
comprehending  almost  all  of  England.  Not  only  was 
the  coast  traffic  more  extensive,  but  an  overland  trade 
was  opened  up  that  had  not  existed  before.  The 
grain,  cattle,  and  dairy  products  of  the  Midlands  were 
brought  to  London,  and  later  textiles  and  iron  and 
steel  products  in  great  volume. 

The  externals  (the  growth  of  population,  expan- 
sion of  the  area  of  the  metropolis  itself  and  of  the 
district  from  which  it  drew  its  supplies,  and  even  the 
volume  of  trade)  are  significant  only  in  so  far  as  they 
point  to  the  new  function  performed  by  the  metrop- 
olis, the  function  of  organizing  business  for  a  wide 
metropolitan  area.  In  the  ancient  world  men  called 
a  city  "metropolitan,"  or  mother  city,  for  that  is  the 
meaning  of  the  word,  when  it  established  colonies  or 
daughter  cities.  Home  fires  were  taken  from  Corinth 
and  made  to  burn  anew  in  Syracuse.  Tradition  makes 
Carthage  the  daughter  of  Tyre,  and  Rome  of  Troy, 
but  such  early  parentage  is  always  a  matter  of  doubt. 
In  the  Middle  Ages  in  western  Europe  the  metrop- 
olis was  the  chief  ecclesiastical  city  of  a  district,  the 


1203-06 

London's 
trade 

1500-1600 


London's 
area  of 
supplies 


1 6th 
century 


i8th  and 
i 9th  cen- 
turies 

Different 
meanings 
of  "me- 
tropolis" 


184    INTRODUCTION  TO  ECONOMIC  HISTORY 

one  where  an  archbishop  presided  over  bishops  and 
other  churchmen.  Notable  examples  of  such  a  center 
are  Antioch,  Mainz,  Canterbury,  and  York.  It  is 
obvious  that  a  metropolitan  ecclesiastical  center 
might  be  economically  of  little  importance  as  in  the 
case  of  Canterbury  and  York.  In  modern  times  a 
metropolis  is  commonly  a  political  center,  a  capital. 
For  centuries  London  has  borne  that  title.  In  quite 
recent  years  the  term  "metropolitan"  has  come  grad- 
ually to  signify  a  very  large  population — such  as  may 
gather  about  a  political  capital  or  economic  center. 
Official  statistics  are  compiled  showing  the  popula- 
tion and  area  of  "metropolitan"  London,  New  York, 
Chicago,  St.  Louis,  Pittsburgh,  and  Detroit.  But 
mere  agglomeration  of  individuals,  important  as  that 
is,  does  not  constitute  a  metropolis  in  the  sense  used 
in  this  book.  What  counts  most  is  commercial  dom- 
inance over  a  wide  area,  a  dominance  which  such 
large  centers  as  Pittsburgh  and  Detroit  do  not  pos- 
sess, for  they  are  manufacturing  towns,  great  and 
rich  as  such,  but  relatively  insignificant  as  marketing 
centers  for  the  adjoining  district. 

The  towns  that  developed  into  economic  metro- 
Requi-  politan  communities  had  to  possess  marked  advan- 
metro*-3  ta£es  over  their  fellows.  Their  situation  had  to  be 
oils  healthful,  not  only  for  a  small  town  population  but  for 

a  larger  group.  The  town  located  on  the  seacoast  or 
a  tidal  river  had  an  advantage  in  that  refuse  would 
be  carried  off  twice  daily  by  tides.  Facilities  for  ship- 
ping are,  of  course,  necessary,  and  by  shipping  we 
mean  here  primarily  loading  and  unloading,  for  land 
as  well  as  water  transportation.  Position,  or  loca- 
tion, between  large  groups  of  consumers  and  produc- 
ers is  vital  for  commercial  growth  and  metropolitan 
economy.  London  lies  between  the  rich  European 


METROPOLITAN  ECONOMY—  ENGLAND         185 

market  and  the  developing  markets  of  the  Orient  and 
America.  Much  of  its  success  has  been  due  to  this 
fact.  And  yet  this  middle  position  is  not  in  itself 
enough.  The  Phoenician  cities,  lying  between  the 
eastern  and  the  western  Mediterranean,  had  it  in 
antiquity;  Italian  cities  had  it  in  the  Middle  Ages; 
and  Flemish  cities  in  the  modern  period.  One  further 
qualification  is  absolutely  necessary.  The  aspiring 
town  or  city  must  possess  a  hinterland,  a  tributary 
adjacent  territory,  rich  in  natural  resources,  occu- 
pied by  a  productive  population  and  accessible  by 
means  of  transportation. 

At  this  point  it  is  well  to  note  some  of  the  different 
terms  applying  to  centers  of  economic  life.    We  pass  Terms 
over  the  village  and  the  town  which  have  already          r 


been  explained.  The  city  for  our  purposes  is  the  same  munities 
as  a  town.  In  ancient  Greece,  it  should  be  noted,  a 
city  was  originally  a  state  —  that  is,  an  independent 
community  with  the  adjoining  territory  politically 
attached.  In  medieval  Europe  the  term  "city"  was 
specially  applied  to  a  town  that  was  fortified,  and 
one  in  which  a  bishop  had  his  seat,  a  cathedral  town, 
like  Chartres  in  France,  and  Winchester  in  England. 
And  in  America  and  elsewhere  the  term  "city"  is 
commonly  applied  to  a  town  that  is  incorporated.  Termi- 
We  may  speak  of  a  city  under  town  economy  as  well 
as  under  metropolitan  economy.  And,  of  course,  guide 
there  are  the  few  cities  or  towns  that  become  economic 
metropolitan  centers  because  of  their  commercial 
dominance. 

The  varying  uses  of  these  terms  together  with  the 
five  meanings  of  the  word  "metropolitan,"  compel  us 
to  note  that  what  counts  is  not  the  word  but  the 
thing,  not  what  it  is  called  but  what  function  it  per- 
forms. A  village  is  what  a  village  does,  and  so  with 


i86    INTRODUCTION  TO  ECONOMIC  HISTORY 


Defini- 
tion of 
metro- 
politan 
economy 

Intra- 
metro- 
politan 
trade 

Inter- 
metro- 
politan 
trade 


Submer- 
gence of 
towns 


Metro- 
politan 
market 


Metro- 
politan 
economy 


a  town  and  a  metropolis.  Political,  ecclesiastical,  ad- 
ministrative, and  legal  concepts  of  communities  should 
in  no  sense  obscure  their  economic  functions. 

38.  METROPOLITAN  ECONOMY.  We  may  think 
of  metropolitan  economy  as  an  organization  of  people 
having  a  large  city  as  nucleus,  just  as  town  economy 
had  a  town  as  its  center.  Or  we  may  put  it  this  way, 
metropolitan  economy  is  the  organization  of  produc- 
ers and  consumers  mutually  dependent  for  goods 
and  services,  wherein  their  wants  are  supplied  by  a 
system  of  exchange  concentrated  in  a  large  city  which 
is  the  focus  of  local  trade  and  the  center  through 
which  normal  economic  relations  with  the  outside  are 
established  and  maintained. 

Just  as  villages  remained  when  town  economy  pre- 
vailed, so  do  towns  remain  when  metropolitan  econ- 
omy comes  into  existence.  Towns  remain,  but  in 
economic  subordination  to  the  metropolis.  They  con- 
tinue to  play  a  part,  but  as  tributaries  to  a  larger 
center.  Towns  exist,  but  not  town  economy.  This 
change  is  marked  by  many  a  struggle  as  independent 
communities  fell  beneath  the  shadow — we  can  hardly 
say  yoke — of  the  metropolitan  center.  Southampton 
and  Britsol  became  subordinated  to  London;  Rouen 
to  Paris;  Salem  and  Portland  to  Boston;  Albany 
and  Buffalo  to  New  York;  Milwaukee  and  Detroit 
to  Chicago. 

A  closer  examination  of  these  dependent  towns 
would  show  different  types  performing  different  func- 
tions, but  all  subordinate.  And  beyond  the  towns 
there  are  more  or  less  scattered  communities  of  pro- 
ducers of  foodstuffs  and  raw  materials,  such  as  farm- 
ers, miners,  fishermen,  and  lumbermen. 

The  large  area  of  many  communities,  or  rather 
the  population,  may  be  called  a  "metropolitan  mar 


METROPOLITAN  ECONOMY— ENGLAND         187 

ket,"  8  and  the  organization  that  sustains  it  "metro- 
politan economy."  It  is  true  that  in  studying  this 
organization  we  are  inclined  to  emphasize  the  great 
metropolitan  center;  but  to  forget  the  large  depen- 
dent district  would  be  fatal  to  a  correct  understand- 
ing of  the  subject.  Perhaps,  indeed,  it  is  somewhat 
incorrect  to  speak  of  the  area  as  dependent  upon  the 
center,  for,  though  that  is  true,  the  center  is  also 
dependent  upon  the  outlying  area  with  its  towns,  vil- 
lages, and  scattered  homesteads.  Interdependence  of 
the  parts  is  really  the  key  to  the  whole  situation. 

39.  FIRST  PHASE:  ORGANIZING  THE  MARKET. 
Such  a  wide  area  of  mutually  dependent  communities 
required  a  well-organized  marketing  system.  In  this 
first  phase,  we  discover,  there  were  developed  most, 
or  all,  of  the  institutions  and  practices  necessary  to 
supply  the  large  agglomeration  of  people.  In  later 
phases  we  find  that  these  were  improved  and  elab- 
orated. 

In  the  stage  of  town  economy  there  had  been  whole- 
salers, merchants  who  "sold  to  the  trade," — that  is,  Whole 
to  other  dealers  rather  than  to  the  consumers.  But 
apart  from  those  handling  a  few  commodities,  they 
were  not  well  developed.  And  in  the  Middle  Ages 
at  least,  those  who  dealt  in  foodstuffs  were  generally 
compelled  to  sell  to  consumers  direct.  For  example, 
the  importing  merchant  had  to  sell  his  wine  directly 
to  the  agents  of  noblemen.  The  peasant  was  forced, 
during  the  early  hours  of  the  day,  to  sell  grain  directly 
from  his  cart  to  the  housewife,  before  the  grain  re- 
tailer was  given  any  chance  at  all.  Indeed,  the  only 
place  where  there  was  full  freedom  to  buy  and  sell 
by  wholesale  was  at  fairs,  and  these  came  only  occa- 
sionally and  lasted  only  a  few  days.  But  when  some 
one  town  grew  into  metropolitan  proportions,  the 


i88    INTRODUCTION  TO  ECONOMIC  HISTORY 

wholesaler  came  into  his  own.  Every  day  was  fair- 
day,  and  every  merchant  might  sell  to  whomsoever 
he  would.  Of  course,  there  were  fitful  returns  to  old- 
time  restrictions,  but  the  general  development  was 
in  the  direction  of  free  trade  for  wholesalers.  And 
indeed,  we  can  readily  see  the  point  when  we  consider 
that  as  the  metropolitan  center  grew,  the  area  for 
supplying  it  grew  likewise,  and  accordingly  it  was 
necessary  to  have  one  class  of  traders  specialize  in 
bringing  goods  into  the  center  and  taking  them  out, 
while  another  handled  them  when  they  arrived. 

At  first  these  wholesalers,  like  their  predecessors 
of  the  town  period,  performed  several  functions. 
They  not  only  bought  and  sold,  but  they  also  stored 
their  goods,  notably  in  the  metropolis  itself,  and  they 
Special-  acted  as  their  own  carriers.  Further  progress  meant 
a  separation  of  these  functions,  so  that  the  merchant 
could  devote  all  his  attention  and  his  capital  to  pur- 
chase and  sale,  leaving  to  other  specialized  dealers 
the  business  of  transporting  the  goods,  and  storing 
them  for  whatever  period  was  necessary.  Gradually 
such  specialists  arose  in  answer  to  the  need,  men  who 
owned  the  pack  horses,  carts,  wagons,  and  coaches, 
required  to  carry  the  goods,  and  who  charged  so 
much  for  each  article  carried.  They  were  open  for 
service  to  anyone  who  wished  to  hire  them,  hence  the 
term  "common  carrier."  Later  the  great  liners  devel- 
oped, and  the  merchants  gave  up  their  steamship  busi- 
ness. The  railroads,  of  course,  have  now  become  the 
most  important  common  carriers.  At  first  they  often 
used  the  coaches  and  wagons  of  the  merchants,  but 
in  time  they  came  to  provide  substantially  all  of  the 
carrying  facilities  (only  a  little  over  half  the  wagons 
in  England,  however),  and  even  assumed  the  risk 
involved  in  transportation. 


METROPOLITAN  ECONOMY— ENGLAND         189 

The  wholesale  merchants  having  long  distances  to 
go  and  accordingly  bearing  great  risks,  and  having  a 
business  peculiar  to  themselves,  formed  various  asso- 
ciations and  combinations  for  their  own  benefit,  and  Ex- 
ultimately  for  the  benefit  of  all  concerned.  The  ex- 
change,  one  of  the  most  notable  of  the  associations,  is 
a  public  place,  at  first  on  the  street  and  later  in  some 
inclosure  or  building,  where  traders  congregate  to  do 
business.  On  entering  a  larger  town  merchants  would 
go  to  the  exchange  generally  centrally  located,  for 
example,  at  Paris  near  the  Great  Bridge.  There  they 
could  get  from  the  money  changer  current  coins  in 
place  of  the  money  they  possessed.  There  on  leav- 
ing they  could  also  obtain  the  money  used  in  other 
towns  to  which  they  might  be  going.  If  it  were  in  Up  to 
London,  this  would  be  done  in  Lombard  Street;  if  in  i*th 
Florence,  in  a  loggia  or  portico.  These  merchants,  century 
importing  and  exporting,  would  have  bills  of  exchange 
to  sell  or  discount,  or  they  might  want  to  buy  them 
rather  than  carry  coins  from  town  to  town.4  Brok- 
ers were  at  hand  to  bring  buyer  and  seller  together. 
Once  having  come  together  for  monetary  reasons,  the 
merchants  might  further  discuss  the  sale  of  cloth 
or  leather,  wine  or  jewels.  So  that  finally  the  ex- 
change would  come  to  be  a  general  place  of  business, 
to  which  even  rich  consumers  might  go  to  make  a 
purchase. 

But  the  metropolitan  exchange  was  somewhat  dif-  Ex- 
ferent.  Consumers  were  eliminated  entirely,  leaving 
the  exchange  a  wholesalers'  market,  though  near  at  metrop- 
hand,  perhaps  in  the  same  building,  consumers  were 
catered  to  by  enterprising  retailers  who  saw  them 
gravitate  toward  the  exchange.  More  and  more  was 
the  trade  confined  to  goods  that  could  be  sold  by  grade 
or  by  sample — that  is,  spices,  silk,  and  precious  metals. 


190    INTRODUCTION  TO  ECONOMIC  HISTORY 

And  finally,  many  kinds  of  securities  were  bought  and 
sold  like  other  commodities. 

In  many  countries  the  exchange  is  called  a  "bourse," 
Bourse       a  term  which  comes  from  Bruges  in  Flanders.     In 
Bruges  there  was  an  old  family  that  had  the  sign  of 
three  purses  on  their  shield.    This  gave  the  name  to 
the  family  (Van  der  Burse)   and  also  to  the  house 
that  they  occupied,  for  indeed  it  bore  the  family  in- 
isth  signia  after  the  fashion  of  the  time.    Later  the  house 

century  wag  usecj  for  mercantile  purposes.  On  a  square  near 
it  merchants  from  various  Italian  towns  congregated 
to  do  business.  The  square  came  to  take  the  name 
of  bourse.  Hence  we  have  this  relationship — first  a 
family  with  the  insignia  of  a  purse  (bourse),  then  the 
house,  the  square,  and  finally  the  assembly  of  mer- 
chants. The  last,  of  course,  constitutes  the  exchange. 
Though  Bruges  had  the  honor  of  providing  the  name 
(bourse)  that  was  most  commonly  used  on  the  Con- 
tinent for  exchange,  it  did  not  really  develop  the  first 
outstanding  exchange.  It  was  a  wholesalers'  market, 
but  was  restricted  to  the  use  of  Italian-speaking 
people.  In  all  probability  it  would  have  developed 
into  the  first  general  exchange,  had  not  the  harbor 
of  Bruges  silted  up  and  trade  left  for  the  neighboring 
Antwerp.  Indeed,  it  is  to  Antwerp  that  we  must  look 
1450-1550  for  the  first  metropolitan  exchange,  one  to  which 
traders  of  all  nationalities  went  to  buy  and  sell  by 
wholesale.  Lyon,  Amsterdam,  Hamburg,  London, 
and  Frankfort  followed  Antwerp's  lead.5 

1534,  In  London  proposals  were  early  made  to  have  the 

J537.  merchants  withdraw  from  the  unsheltered  Lombard 
Royal  Street  to  a  place  where  rain  and  mud  would  not  ham- 
Exchange  per  business,  in  fact,  to  found  a  bourse.6  Finally,  Sir 
1564  Thomas  Gresham  proposed  to  build  an  exchange, 
provided  the  city  of  London  would  supply  the  land- 


METROPOLITAN  ECONOMY— ENGLAND         191 

site.7  This  became  the  Royal  Exchange,  twice  burned, 
but  still  doing  business — in  the  third  building.  The 
Royal  Exchange  consisted  of  a  square  and  colonnade 
in  which  the  merchants  assembled  twice  daily,  shops 
above  for  retailers,  and  cellars  below  for  storing 
goods.  Besides  being  a  great  center  for  business,  it 
was  the  scene  of  a  good  deal  of  social  intercourse, 
at  a  later  date  of  a  rather  boisterous  and  illicit  kind. 
At  various  prominent  places  topping  the  Exchange 
was  the  sign  of  the  grasshopper — not  of  the  purse — 
the  sign  that  Gresham's  own  house  bore  in  Lombard 
Street.  The  building  in  general  plan  and  in  many 
details  was  modeled  after  the  bourse  at  Antwerp, 
where  Gresham  had  done  so  much  business  both  for 
himself  and  for  his  country.  Although  the  Royal 
Exchange  nowadays  reflects  but  faded  memories  of 
its  past,  it  still  stands  as  a  monument  to  the  metro- 
politan merchant  (mercer)  and  financier,  who  dying 
childless  made  the  public  his  heir  not  only  to  the  Royal 
Exchange  but  to  Gresham  College. 

In  America  when  exchanges  have  been   founded, 
they  have  usually  been  patterned  after  the  London  Early 
institution,  at  least  the  early  ones.     In  colonial  days 
Boston  had  its   Royal  Exchange  where   there  were   De- 
walks  for  merchants  and  around  which  there  were 
several  booksellers'  shops.8 

As  metropolitan  centers  have  gone  on  developing, 
a  third  kind  of  exchange  has  come  into  existence — 
specialized  bourses.  Instead  of  one  general  exchange  Special- 
there  came  to  be  many,  one  for  securities,  the  stock. 
exchange;  one  for  some  single  merchandise,  such  as 
the  cotton,  the  coffee,  or  the  corn  exchange;  and  one 
for  a  group  of  related  commodities  such  as  the  produce 
exchange,  handling  grain,  meat,  eggs,  hay,  and  the 
like.  In  London  the  Royal  Exchange  is  left  with  one 


I92     INTRODUCTION  TO  ECONOMIC  HISTORY 


Minor 
ex- 
changes 


Joint- 
stock 
com- 
panies 


1553 


Chart- 
ered 1600 
First 
voyage 
1601-06 
Reorgan- 
ized 1609 


of  its  original  functions,  the  sale  of  foreign  bills  of 
exchange. 

It  should  not  be  thought  that  exchanges  exist  only 
in  metropolitan  centers,  for  only  the  great  ones 
are  there.  Minor  exchanges  are  found  in  large  towns 
or  incipient  metropolitan  cities  near  the  place  of  pro- 
duction or  near  the  consuming  market.  Examples 
of  the  former  are  the  cotton  exchange  at  Alexandria, 
Egypt,  the  grain  exchanges  at  Duluth  and  Peoria, 
and  of  the  latter  the  coffee  exchanges  at  Havre  and 
Bremen:  Stock  exchanges  exist  in  provincial  towns,9 
but  neither  in  number  of  members  nor  in  volume  of 
business  are  they  important.  Such  towns  merely  ap- 
proximate the  position  of  Antwerp,  Amsterdam,  and 
London  in  the  i6th  century  when  the  first  metropol- 
itan exchanges  were  established. 

The  same  merchants  that  were  founding  exchange 
associations  were  establishing  joint-stock  companies, 
notably  for  colonization  and  trade.  Although  the 
joint-stock  company  was  used  before  the  metropolis 
existed,  it  was  not  an  important  factor  in  trade  till 
the  metropolitan  stage.  Anv  venture  that  required 
much  capital  and  encountered  great  risk,  was  difficult 
for  one  man  even  though  rich.  Accordingly,  a  joint- 
stock  was  formed.  When  well  developed,  this  joint- 
stock  was  made  up  of  a  specified  number  of  shares 
of  equal  value,  and  available  for  sale.  Although  the 
first  joint-stock  company  in  English  commerce  was 
probably  the  Russia  Company,  the  earliest  of  impor- 
tance was  the  East  India  Company,  founded  chiefly 
by  London  merchants,  to  trade  directly  with  India, 
Ceylon,  and  the  East  Indian  islands.  Shortly  after 
this,  the  Virginia  Companv  was  created  to  colonize 
and  develop  Virginia.  English  noblemen  and  London 
merchants  were  the  backers  of  the  company  and  sank 


METROPOLITAN  ECONOMY— ENGLAND         193 

a  good  deal  of  money  in  their  venture,  which  was 
financially  unprofitable.  Besides  gain,  the  founders 
hoped  for  a  conversion  of  the  heathen  natives  of 
America  and  for  relief  from  over-population  in  Lon- 
don. Vagrant  children  were  to  be  sent  out  as  colo-  For 
nists,  and  indeed  were  so  sent.10  A  similar  company  \™™p  e> 
was  established  by  London  merchants  for  the  planta- 
tion of  Ireland.  The  merchants  invested  in  this  enter-  1610 
prise  not  directly  but  indirectly  through  their  gilds 
or  livery  companies.  They  hoped  to  relieve  crowd- 
ing in  the  metropolis  by  sending  Londoners  over  to 
Ulster,  and  to  gain  financially  by  the  exploitation 
of  certain  territory,  notably  Derry  and  its  district  of 
four  thousand  acres  and  Coleraine  with  three  thou- 
sand acres.  It  should  be  said  that  this  enterprise 
was  not  at  the  initiative  of  the  merchants  but  was 
inspired  by  the  government  of  the  day,  so  as  more 
readily  to  hold  Ireland  in  obedience  and  to  propagate 
the  Protestant  faith.  At  any  rate  the  subscribers  put 
out  a  lot  of  money  receiving  no  dividends  for  thirteen 
years.11 

The  formation  of  joint-stock  companies  gave  an 
enormous  impetus  to  metropolitan  development.     En-  Joint- 
terprises,  not  otherwise  to  be  undertaken,  were  pos-  *^ 
sible,12  sometimes  to  explore,  sometimes  to  colonize,   panics 
and  sometimes  just  to  carry  on  trade.    Of  course,  they  Centra-" 
were  used  for  mining  and  manufacturing,13  but  with  tion 
these  we  are  not  now  concerned.     The  known  world 
of  commerce  was  divided  up;    one  company  was  to 
develop   the   Baltic  Trade,    others   the   Russian,   the 
Levant,   the  East  Indian,  the  West  Indian,   and  so 
on.14    The  merchants  of  Paris  as  well  as  of  London 
were   organized   into  joint-stock  companies.      When 
success  came  to  these  companies,  it  meant  an  enor- 
mous inflow  of  materials  from  all  parts  of  the  world 


194    INTRODUCTION  TO  ECONOMIC  HISTORY 

and  a  corresponding  outgo  of  goods  not  needed  at 
home.  In  other  words,  it  provided  for  concentra- 
tion of  commerce  never  before  contemplated.  Of 
course,  the  ambitious  metropolis  was  hard  put  to  it 
to  find  capital  for  such  investments.  But  the  fact  that 
shares  could  be  issued  enabled  it  to  succeed,  for  the 
capital  not  only  of  merchants  but  of  orphans  and 
widows,  clergymen,  gentlemen,  and  others  not  able 
to  engage  directly  in  trade,  could  be  invested  in  stock. 
And  the  people  of  a  wide  area,  the  nobles  at  first,  and 
later  others,  could  be  enlisted  to  give  aid  to  such 
gainful  enterprises.  Where  the  companies  were  care- 
fully and  conservatively  managed  (usually  where  the 
merchants  were  in  charge),  the  companies  were  suc- 
cessful because  the  people  would  have  confidence 
enough  to  invest,  and  the  ventures  would  bring  in 
returns.  London  was  the  outstanding  illustration  of 
success,  Paris  of  failure. 

It  was  by  means  of  such  trading  companies  that 
the  metropolitan  centers,  such  as  Amsterdam,  Lon- 
don, and  Paris,15  secured  new  markets  and  strength- 
Two  ened  old  ones.  Two  different  kinds  of  trade  were 
trade:°  involved,  which  we  may  call  the  "extended"  and  the 
"local"  or  "hinterland."  The  hinterland  trade  takes 
place  inside  the  area:  it  is  intra-metropolitan.  The 
extended  trade  lies  outside  the  area :  it  takes  place 
between  the  metropolitan  unit  and  the  great  beyond. 
When  the  extended  trade  is  between  two  centers  that 
are  both  metropolitan,  we  may  call  it  inter-metropol- 
itan. The  hinterland  trade  is  the  wheel  of  the 
machine;  the  extended  trade  the  belt  connecting  the 
wheels. 

i.    Ex-  Probably  from  the  first  the  town  had  carried  on  an 

extended  trade  with  distant  towns,  whether  in  the 
same  country  or  in  foreign  lands.  As  early  as  1200, 


METROPOLITAN  ECONOMY— ENGLAND        195 

Bruges  received  wares  from  almost  all  the  known 
lands  of  Europe,  North  Africa  and  Asia  Minor.18 
The  metropolis  merely  multiplied  the  connections. 
The  discovery  of  America  and  the  opening  up  of 
the  South  Seas  offered  unprecedented  opportunities. 
More  distant  markets  were  available,  and  commodi- 
ties were  brought  direct,  such  as  spices  and  cloth, 
which  had  formerly  come  overland  at  high  cost  and 
in  small  amounts.  Soon  they  were  coming  by  ship  at 
low  cost  and  in  large  quantities,  so  that  there  arose 
that  phenomenon  of  modern  trade,  the  glut.  The 
phrase,  "a  drug  on  the  market,"  perhaps  originally 
signifying  something  hard  to  take  or  not  wanted, 
might  in  the  i6th  century  be  thought  of  as  taking  on 
a  new  meaning  when  oriental  drugs  and  spices  reached 
the  European  Atlantic  ports,  not  in  a  single  ship  but 
often  in  a  whole  fleet  of  ships.  And  we  must  not 
forget  the  products  of  the  Americas:  Peruvian  gold 
and  silver,  West  Indian  sugar,  Virginian  tobacco, 
Carolinian  indigo  and  rice,  New  York  furs  and  New 
England  lumber.  Of  course,  this  is  but  one  side  of 
the  trade,  for  these  wares  had  to  be  paid  for  in  goods 
(ordinarily  manufactures) ,  except  in  the  case  of  Spain 
which  secured  much  of  its  supplies  by  forced  labor 
and  not  by  trade.  As  Britain's  empire  grew,  many 
of  the  individual  planters  and  the  colonies  also  ap- 
pointed agents  resident  in  London  to  look  after  their 
affairs,  in  the  case  of  the  planters  to  sell  their  raw 
products  and  purchase  manufactures. 

The  counterpart  of  this  extended  trade  was  hinter-  2.  Hin- 
land  trade.  Although  London  might  pay  Boston 
(Mass.)  for  its  lumber  or  fish  by  sending  tea  from 
Ceylon  or  spices  from  the  East  Indies,  it  was  also 
obliged  to  send  a  large  amount  of  hinterland  prod- 
ucts, woolens,  hardware,  books,  and  many  luxuries. 


196    INTRODUCTION  TO  ECONOMIC  HISTORY 

As  the  extended  trade  increased,  it  was  necessary  to 
widen  the  hinterland  market  to  provide  an  ample  base 
for  further  expansion.  The  local  or  home  market 
of  the  town  had  been  an  area  having  a  radius  of  a 
score  or  more  of  miles.  But  the  growing  metropolis 
was  compelled  to  extend  its  district  more  and  more, 
till  in  the  case  of  London  it  included  substantially  all 
of  England,  only  the  extreme  northwest  probably 
lying  outside.  Later  when  other  cities  developed  in 
England  to  share  the  foreign  trade  with  London,  it 
lost  some  of  its  home  base,  notably  the  territory 
around  about  Manchester-Liverpool,  which  we  may 
regard  as  functionally  one  center.  Such  division  of 
local  or  home  marketing  territory  does  not  mean  loss 
of  extended  trade,  because  the  area  that  remains  may 
be  more  intensively  developed,  and  because  the 
metropolis  may  stress  its  entrepot  trade.  This  is 
just  what  London  did,  it  became  more  and  more  a 
port  at  which  distant  wares  were  assembled,  and  from 
which  they  were  sent,  being  stored  there  for  assort- 
ment before  being  shipped  elsewhere. 

It  is  clear  that  a  metropolitan  city  which  focused 
Metro-  in  itself  both  extended  and  hinterland  trade  must  be 
storage  a  great  storage  center.  Indeed,  storage  becomes  in 
metropolitan  economy  a  vital  part  of  commerce;  it 
had  always  been  an  important  part.  A  larger  variety 
of  wares  was  laid  up,  and  a  larger  amount  also.  Most 
of  them  came  from  greater  distances.  Hinterland 
goods  were  housed  ready  to  be  sent  to  participate  in 
the  extended  trade.  In  fact,  storage  helps  to  inter- 
relate the  two  departments  of  commercial  organiza- 
tion, hinterland  and  extended,  so  that  they  can 
exchange  their  goods  just  as  connected  reservoirs 
exchange  their  supply  of  water. 

In  the  town  stage  the  storage  accommodation  was 


METROPOLITAN  ECONOMY— ENGLAND         197 

in  the  hands  of  retailers  and  wholesalers.  It  was 
usually  a  cellar  or  a  shed,  near  a  store,  workshop,  or 
dock.  In  the  metropolitan  period  there  were  con- 
structed specialized  warehouses,  belonging  to  men  Spe- 
whose  chief  business  was  to  care  for  the  goods  of 
others,  charging  so  much  per  gallon  or  per  bushel  for 
wares  stored.  Gresham's  Royal  Exchange  provided 
such  special  service.  When  the  law  of  England  Early 
allowed  goods  to  be  imported  and  then  exported  free 
of  duty,  special  bonded  warehouses  were  required; 
as  also  when  imported  wares  had  to  pay  duty  only  Early 
when  removed  for  domestic  consumption.  So  far  has 
this  separate  business  of  warehousing  gone  that  im- 
mense amounts  of  capital  have  been  invested  in  it, 
and  in  some  instances  concentrated  in  a  few  hands, 
as  in  the  case  of  the  Liverpool  Warehousing  Com- 
pany and  the  Bush  Terminal  Company  of  New  York. 
The  growth  of  the  metropolis  involved  many  new 
developments  in  business  enterprise,  of  which  special- 
ization was  but  one.  Larger  amounts  of  capital  were  New 
required.  Credit  was  used  as  never  before  in  busi-  business 

enter- 

ness.     Advertising    gradually     became     a     valuable  prises 
adjunct  to  sale  and  purchase.17     Merchants  began  to  London, 
hustle,  to  go  out  for  trade  rather  than  to  wait  for  it.   l658f- 
And  so  much  competition  was  there  for  business  that 
some  undertook  to  make  new  things  out  of  old.     The 
Jews   were   prominent   in   the    introduction   of  both 
hustling  methods  and  making  shoddy  cloth.18 

The   new   methods    of   business    arose    only   after 
many  experiments  and  after  many  failures  and  suc- 
cesses. The  period  required  was  long  and  the  outcome  Experi- 
in  some  instances  uncertain.     Individuals  made  their  mentsin 
experiments  and,  when  they  succeeded  in  establishing 
a   new   warehouse    or    in    setting  up    an    advertising 
agency  or  starting  the  manufacture  of  shoddy  cloth, 


i98     INTRODUCTION  TO  ECONOMIC  HISTORY 

,the  metropolitan  organization  was  so  much  the 
stronger.  When  they  failed,  some  one  else  tried  and 
managed  to  succeed. 

At  one  point,  however,  it  was  necessary  for  the 
Metrop-     public  authorities  to  step  in  to  direct  private  action 
oils  and      and  even  to  enter  the  field  of  business  themselves. 
The  growing  town — especially  an  incipient  metrop- 
olis— could  not  afford  to  take  any  risks  on  its  grain 
supply,  for  not  simply  prosperity  but  life  was  at  stake. 
Medieval    London    with    its    population    of    forty 
or   fifty    thousand   could   subsist   on    grain   brought 
from    the    near-by    country    districts,    supplemented 
occasionally  by  shipments  from  other  towns.      But 
metropolitan  London  was  compelled  to  look  farther 
and  farther  afield  for  its  grain  supply.     Of  course, 
it  was  not  possible  to  develop  a  market  in  the  hinter- 
land in  a  short  period  of  time,  and  so  foreign  towns 
Polish        were  called  upon,  especially  Dantzig.     In  spite  of  the 
grain         fact  that  the  national  government  was  brought  in  to 
Dantzig     ne^P  s°lve  the  problem  of  food  supply,  it  was  only 
at  the  end  of  about  one  hundred  and  fifty  years  that 
1514-1660   the   adjustment  was   made,    and   that   London   had 
1660          enough  grain  and  to  spare.    At  that  time  London  had 
organized  a  metropolitan  grain  market,  with  country 
buyers  and  metropolitan  merchants  possessing  large 
amounts  of  capital,  ample  warehouses,  and  wide  busi- 
ness connections. 

1514-1660  In  the  intervening  period  the  London  authorities 
London  tried  to  solve  their  food  difficulties  by  elaborate  regu- 
lations of  purchase  and  sale  after  the  fashion  of  the 
town.  They  were  unable  to  appreciate  the  significance 
of  the  new  changes.  Their  efforts  made  the  situation 
worse  in  many  respects,  but  clearly  registered  their 
problem.  One  of  their  solutions,  and  one  of  the  best, 
was  to  buy  up  grain  when  cheap,  store  it  in  granaries, 


stores 
grain 


METROPOLITAN  ECONOMY— ENGLAND 


199 


and  sell  when  there  was  a  dearth,  not  at  famine  prices 
but  at  reduced  rates.  After  doing  this  themselves 
for  a  period,  the  London  magistrates  turned  the  busi- 
ness over  to  the  gilds  who  in  a  half-hearted  way 
continued  to  buy,  to  store,  and  to  lose  money. 

During  this  period  of  adjustment  of  food  supplies, 
the  growing  metropolis  scoured  the  grain  areas  that 
were  at  all  available  and  often  developed  animosities 
and  rivalries  of  far-reaching  results.  London  was 
jealous  even  of  Lynn's  trade  in  grain,  for  both  Lon- 
don and  Lynn  drew  their  supply  from  the  same  dis- 
trict.19 Paris  and  Rouen  and  Paris  and  Lyon  were  com- 
petitors for  grain  in  the  districts  adjacent  to  them.20 
But  one  of  the  best  illustrations  comes  from  America. 
In  the  western  part  of  New  York  State  there  is  a  very 
fertile  valley  through  which  the  Genesee  River  flows. 
Excellent  wheat  is  grown  there.  And  when  the  At- 
lantic seaport  towns  began  to  develop  and  to  feel  the 
shortage  of  foodstuffs,  they  became  competitors  for 
Genesee  grain  and  flour.  Montreal  had  some  advan- 
tage at  first,  but  New  York  City,  Boston,  Philadel- 
phia, and  Baltimore  improved  their  means  of  com- 
munication till  they  won  easily  and  completely.  Their 
success,  however,  was  greater  than  merely  tapping 
the  Genesee  Valley:  they  opened  the  whole  Amer- 
ican West  and  henceforth  their  growth  in  population 
and  trade  was  unhampered  by  any  lack  of  foodstuffs. 

Issues  so  near  to  the  heart  of  man  as  gaining 
wealth  and  living  in  luxury,  and  so  near  to  his  very 
existence  as  securing  a  food  supply,  we  might  think, 
would  not  fail  to  develop  a  metropolitan  policy.  The 
metropolitan  unit  (metropolis  and  hinterland),  how- 
ever, for  various  reasons  has  no  policy.  It  has  up  to 
the  present  no  organization  of  a  formal  character, 
no  parliament  or  congress  of  representatives  to  frame 


1514-78 
1578-1678 


Competi- 
tion for 
grain 

1572 


i6th  and 
iyth  cen- 
turies 


No 

formal 
metro- 
politan 
organ- 
ization 


200    INTRODUCTION  TO  ECONOMIC  HISTORY 

a  policy  and  no  executive  to  put  a  policy  into  opera- 
tion. Probably  the  nearest  approach  to  such  organ- 
ization is  to  be  found  in  such  communities  as  Florence 
and  Venice  in  the  early  modern  period.  But  even  in 
such  instances  it  is  the  center — which  may,  indeed, 
be  a  budding  metropolis — that  dominates  the  whole 
district  or  hinterland.  The  policy  in  such  cases  would 
not  be  so  representative  of  the  whole  unit  as  of  the 
commercial  (and  political)  center. 

Another  reason  why  the  metropolitan  unit  (not  the 
National  same  as  the  metropolis  itself)  has  developed  no  policy 
over-  °^  *ts  own  'ls  tnat  tne  political  or  national  organiza- 
cloudsthe  tion  forged  ahead  of  it.  The  state  is,  of  course,  a 
pofitan  very  old  institution,  older  than  the  metropolis.  And 
unit  although  the  state  took  a  very  long  time  to  develop 

an  economic  policy,  it  had  time  enough,  during  the 
stages  of  village  and  especially  town  economy,  to  feel 
its  way  towards  an  economic  viewpoint  which  it 
brought  to  a  head  before  the  metropolis  gained  any 
strength.  How  much  accelerating  influence  the  cen- 
tralization of  the  economic  life  in  one  large  city,  or 
in  several  large  cities,  had  upon  the  growth  of  a 
national  policy,  it  is  hard  to  say,  though  it  was  prob- 
ably considerable. 

The  state  was  the  organization,  then,  that  fore- 
stalled the  metropolitan  unit  in  the  establishment  of 
an  economic  policy.    And,  as  was  to  be  expected,  that 
policy  was  national  rather  than  metropolitan. 
i6thto  This  policy,   developed  by  European   states   and 

Jury"  known  as  mercantilism,  aimed  at  making  the  nation 
strong  economically,  not  by  allowing  all  men  and  all 
Mercan-  classes  to  work  out  their  own  economic  welfare,  but 
by  guiding,  restraining,  and  restricting.  Home  in- 
dustries of  all  kinds  were  to  be  helped,  by  means  of 
prohibitions  against  importing  certain  foreign  wares, 


METROPOLITAN  ECONOMY— ENGLAND        201 


by  protective  tariffs,  and  even  by  bounties  on  the  pro- 
duction of  wares  for  export.  It  was  essentially  a 
political  policy  with  an  economic  basis.  The  nation 
was  to  be  made  economically  strong  so  that  it  might 
remain  politically  independent  and  masterful.  It  was 
to  develop  its  manufactures,  its  agriculture,  its  ship- 
ping, and  its  trade,  so  that  its  enemies  might  not 
take  an  unfair  advantage  of  it  in  time  of  peace  and 
might  not  rob  it  of  independent  existence  in  time  of 
war.  With  abundance  of  food  produced  at  home, 
with  plenty  of  raw  materials  carried  in  its  own  mer- 
chant marine  defended  by  its  own  navy,  with  weapons 
made  by  its  own  manufacturers,  and  with  plenty  of 
gold  and  silver  brought  in  by  merchants  who  exported 
more  wares  than  they  imported,  the  mercantilistic 
state  hoped  to  be  strong  and  to  endure. 

Mercantilism  was  the  policy  of  the  town  writ  large 
in  the  affairs  of  the  state.21  Gradually  the  town  had 
worked  out  a  plan  for  encouraging  in  a  narrow  way 
the  economic  life  of  its  own  citizens  as  against  country 
people  and  inhabitants  of  other  towns.  Elaborate 
plans  for  controlling  the  food  supply  had  been  drawn 
up  and  enforced  by  the  town  authorities  themselves, 
while  the  management  of  other  trades  had  been  dele- 
gated to  the  craft  gilds.  In  the  mercantilistic  period 
the  concept  of  citizenship  was  extended  to  the  whole 
state  and  regulation  was  planned  and  executed  by 
the  national  government  or  by  individuals  or  asso- 
ciations to  whom  (as  to  the  gilds)  authority  was 
delegated. 

Mercantilism  was  accepted  by  the  metropolitan  unit 
for  three  reasons.  People  in  the  metropolis  and  in 
the  towns  of  the  hinterland  were  already  familiar 
with  a  similar  policy  under  the  old  regime  of  town 
economy.  Most  people,  seeing  the  necessity  of  polit- 


Town 

policy 
becomes 
mercan- 
tilism 


Mercan- 
tilism 
favorable 
to  metro- 
politan 
economy 


202     INTRODUCTION  TO  ECONOMIC  HISTORY 


Mercan- 
tilism 
unfav- 
orable 
to  metro- 
politan 
economy 


1678  f. 


London 
and  the 
favorable 
balance 


ical  centralization,  were  coming  to  favor  national  as 
distinguished  from  local  action.  And  mercantilists 
generally  assumed  internal  free  trade22  (as  in  Eng- 
land), or  where  it  did  not  exist  (as  in  France)  they 
tried  to  bring  it  about.  To  the  metropolis  this  meant 
an  opportunity,  unimpeded  by  local  hindrance  or 
provincial  toll,  to  organize  and  develop  the  trade  of 
the  hinterland. 

Some  parts  of  mercantilism,  however,  could  not  be 
regarded  as  coinciding  with  the  interest  of  the  metro- 
politan unit  or  working  to  its  advantage,  at  least  not 
until  somewhat  modified.  Mercantilism  was  partly 
based  on  the  assumption  that  foreign  trade  needed 
watching  at  all  times  and  careful  regulation  on  cer- 
tain occasions.  It  sought  most  of  all  to  make  exports 
greater  than  imports,  so  that  gold  would  have  to  be 
brought  in  to  pay  for  the  excess  of  goods  exported. 
It  interpreted  this  doctrine  in  a  narrow  way,  apply- 
ing it  to  single  countries  rather  than  to  all  foreign 
customers  collectively.  So  that  if  statistics  of  for- 
eign trade  proved,  or  seemed  to  prove,  that  England 
imported  more  wares  from  France  than  it  exported 
to  France,  then  the  trade  with  that  country  was  to  be 
condemned  and  even  prohibited  in  whole  or  in  part. 

Although  some  London  merchants  were  prominent 
in  upholding  this  narrow  concept  of  a  favorable  bal- 
ance of  trade  and  were  active  in  prohibiting  trade  with 
France,  nevertheless  other  Londoners,  such  as  Mun, 
Barbon,  Child,  and  North,  were  conspicuous  in  their 
opposition  to  the  general  practice.  This  opposition 
took  the  form  of  standing  out  against  the  policy  when 
applied  to  the  East  Indian  trade  which  was  said  to 
drain  England  of  her  precious  metals.  Out  of  the 
controversy  over  this  matter  arose  a  somewhat  more 
intelligent  mercantilism,  in  which  the  favorable  bal- 


METROPOLITAN   ECONOMY— ENGLAND        203 

ance  theory  was  applied  to  foreign  trade  generally 
rather  than  to  trade  with  one  particular  country.  And 
yet  the  restriction  of  foreign  commerce  continued  to 
the  detriment  of  metropolitan  extended  trade. 

Mercantilism  favored  regulation  not  only  directly 
by  the  national  government  but  indirectly  through  London 
persons  and  companies  to  whom  a  monopoly  of  manu- 
facture or  trade  had  been  given.  On  this  question 
Londoners  were  divided  as  were  the  people  of  the 
hinterland.  Those  having  a  monopoly  of  making 
soap  in  London  and  other  towns  naturally  favored 
monopolies;  soap  makers  who  had  no  monopoly  as 
naturally  opposed  the  system.  Likewise,  Londoners 
having  a  monopoly  of  certain  parts  of  extended  trade 
through  their  chartered  companies  defended  the 
monopoly;  while  other  Londoners,  and  more  espe- 
cially the  merchants  of  the  hinterland,  became  inter- 
lopers or  commercial  free  lances,  violating  the 
monopoly  and  championing  free  (or  non-monopolistic) 
trade  with  other  countries.  It  was  in  the  interest  of 
metropolitan  development  to  have  no  monopoly  in 
manufacture  or  trade  except  when  it  was  to  introduce 
a  new  industry  or  to  open  up  a  difficult  and  hazardous 
branch  of  commerce.  In  time,  national  policy  and 
practice  were  changed  so  that  they  coincided  with 
metropolitan  interest  and  advantage,  but  this  was 
only  in  a  later  phase  of  metropolitan  economy. 

There  was  a  third  element  in  mercantilism  that  did 
not  work  to  the  advantage  of  the  metropolitan  unit. 
Mercantilism    had    stressed    manufactures    on    the  London 
ground  that  they  provided  expensive  goods  for  export  mami. 
and  thereby  increased  the  likelihood  of  a  favorable  factures 
balance  of  trade.23    In  the  first  phase  of  metropolitan 
economy  the  chief  concern  of  the  metropolitan  unit 
was  not  so  much  advance  in  industry  as  reorganization 


204     INTRODUCTION  TO  ECONOMIC  HISTORY 

of  the  marketing  system  from  a  town  to  a  metropol- 
itan basis.  But  when  the  second  or  industrial  phase 
of  metropolitan  economy  was  reached,  metropolitan 
interest  and  national  mercantilistic  policy  coincided 
in  so  far  as  both  were  then  concerned  with  progress 
in  manufactures. 

Within  the   fold  of  the   state  we  find  the   town 

developing  and  after  it  the  metropolis.     And  both 

Efficiency   town  and  metropolis  came  into  existence  for  the  same 

politan°     reason.    Each  performed  a  service  more  cheaply  than 

economy     jt  could  otherwise  be  performed.     We  may  assume 

in  storage  ,  .    .  j      j       £    r    • 

on  the  part  or  men  a  rising  standard  or  living,  a 
capacity  for  increasing  their  consuming  power.  In 
practice,  we  find  a  general  desire  to  secure  more  goods 
for  use,  to  increase  the  variety  and  the  quality.  In- 
deed, these  three,  quantity,  quality,  and  variety,  may 
be  regarded  as  three  of  the  pillars  of  human  material 
welfare.  The  metropolis  organized  or  reorganized 
trade  so  that  these  three  would  be  increasingly  avail- 
able. By  specialization  this  was  possible,  by  working 
harder,  and  by  adventuring  to  far-off  seas  for  new 
and  varied  supplies.  But  could  not  towns,  more  or 
less  equal,  have  developed  to  such  an  extent  that  they 
could  have  produced  the  same  results?  It  becomes 
a  question  of  whether  one  metropolitan  center  or 
many  co-ordinate  towns  could  more  efficiently  do  the 
work.  The  answer  is  decidedly  in  favor  of  the  metro- 
politan center,  because  it  could  function  with  less 
expenditure  of  capital,  labor,  and  management.  In 
the  beginning  these  were  scarce  and  the  economy  of 
concentration  was  especially  important.  Individuals 
want  goods,  as  we  have  seen,  in  plenty,  variety,  and 
quality.  The  cost  of  storing  a  great  number  and 
variety  of  wares  In  all  towns  would  be  enormous; 
the  cost  of  storing  them  in  the  metropolis  is  relatively 


METROPOLITAN  ECONOMY— ENGLAND        205 


slight.  A  special  order  from  a  town — of  a  kind  not 
found  once  in  a  hundred  times — can  be  sent  to  the 
metropolis  to  be  filled.  It  can  now  be  sent  by  mail, 
telephone,  or  telegraph,  so  that  the  delay  is  negligible. 

Wares  might  be  transported  from  one  town  to 
another,  regardless  of  the  location,  and  without  going 
to  a  metropolitan  center.  It  is  physically  possible, 
that  all  the  highways,  canals,  and  railways  should 
form  a  kind  of  checker-board  with  towns  at  the  places 
where  the  lines  cross,  rather  than  a  spider  web  at  the 
center  of  which  lies  the  master  metropolis.  But  such 
a  checker-board  system  would  be  wasteful.  It  is  more 
economical  and  efficient  to  make  a  few  roads  per- 
form a  great  deal  of  service  rather  than  a  little,  for 
the  roads  have  to  be  maintained  anyway.  It  costs 
less  to  run  a  few  full  trains  on  the  lines  centering  in 
the  metropolis  and  connecting  one  metropolis  with 
another  than  it  would  cost,  if  there  were  only  towns 
and  no  metropolis,  to  run  many  half-loaded  trains 
on  parallel  lines  connecting  town  and  town. 

The  same  principle  of  economy  or  saving  prevails 
throughout.  In  the  use  of  capital  we  see  it  to  a 
marked  degree.  The  surplus  funds  of  a  wide  area 
may  be  concentrated  for  full  use  in  the  metropolis, 
while  lying  in  individual  towns  they  would  remain 
relatively  idle. 

Just  as  we  get  more  goods  in  greater  variety  and 
of  higher  quality  in  metropolitan  than  in  town  econ- 
omy, so  we  get  a  greater  variety  of  personal  services 
through  the  concentration  in  the  metropolitan  center 
of  specialists  in  great  variety — in  medicine,  law, 
science,  and  business.  The  citizen  of  a  town  gets 
service  at  a  lower  rate  by  going  to  these  in  the  metrop- 
olis than  by  attempting  to  maintain  them  in  his  home 
town,  even  if  that  were  possible. 


Efficiency 
in  trans- 
portation 


Efficiency 
in  use  of 
capital 


Efficiency 
in  per- 
sonal 


206    INTRODUCTION  TO  ECONOMIC  HISTORY 


Personal 

motive 

and 

public 

service 


Social 
and 

political 
factors  in 
metro- 
politan 
devel- 
opment 


From 
uoo  to 
1500 

1 6th 

century 

following 


Of  course,  the  motive  of  the  chief  functionaries  in 
the  metropolis,  the  great  financier,  the  wholesaler, 
the  broker,  the  warehouseman,  the  medical  specialist, 
the  commercial  and  international  lawyer,  and  the 
business  expert,  is  one  of  personal  gain.  Each  sees  a 
chance  to  earn  a  living  and  to  secure  an  income,  by  per- 
forming a  service  new  or  old,  one  of  value  to  a  wider 
area,  and  a  larger  group  of  people  than  existed  before. 

Many  services  that  are  non-economic  are,  of  course, 
performed  by  the  metropolis.  There  is  a  strong 
desire  in  some  people  to  move  into  a  larger  group  so 
that  they  may  be  lost  to  the  world.  Lost  in  the  crowd 
is  a  seclusion  almost  equal  to  that  of  the  desert.  On 
the  contrary,  some  flock  to  the  large  city  to  join  in 
its  social  life.  The  need  for  political  organization, 
quite  apart  from  economic  affairs  also  leads  to  con- 
centration of  population;  and,  as  we  have  seen,  the 
word  "metropolis"  applied  to  a  political  before  an 
economic  group.  Around  the  political  functionaries, 
cabinet  members,  congressmen,  clerks,  military  guard 
would  grow  up  a  host  of  servants  and  professional 
people  to  help  them  in  the  daily  task.  All  this  is  very 
real  and  undoubtedly  such  centers  as  London,  Paris, 
and  Berlin  were  powerfully  aided  by  political  con- 
siderations. In  order  that  the  provinces  might  be 
held  together  by  force,  the  Romans  had  built  roads 
radiating  in  several  directions.  And  these  same  roads 
later  became  a  centralizing  influence  in  the  political 
life,  for  example,  of  England.  They  also  powerfully 
aided  London  to  develop  into  an  economic  metropolis. 
But  this  situation  was  more  helpful  than  creative, 
more  contributory  than  determining;  otherwise, 
Rome  on  which  so  many  roads  converged  would  have 
become  an  economic  metropolis,  while  in  fact  it  never 
fully  developed  even  as  a  town. 


METROPOLITAN  ECONOMY— ENGLAND         207 


If  metropolitan  economy  is  so  economical  and  if 
it  caters  so  much  to  the  general  needs  of  men,  why 
does  it  develop  so  relatively  late  in  history,  or  at  least 
reach  maturity  only  in  modern  times? 

Earliest  Babylon  was  a  collection  of  villages.  Later 
it  became  an  economic  town  with  an  important  car- 
avan and  river  trade.  Commerce  from  the  four 
quarters  of  the  ancient  world  centered  there.  Cer- 
tainly, it  was  in  outward  appearance  close  to  metro- 
politan economy.  Perhaps  if  we  could  learn  all  the 
facts,  we  should  say  that  Babylon  at  its  height  attained 
the  first  phase  of  metropolitan  economy  or  was  about 
to  enter  it. 

Tyre,  Sidon,  and  Carthage,  Athens,  Corinth,  and 
Delos,  Antioch,  and  Ephesus,  all  attained  eminence 
as  commercial  centers  and  some  entered  the  second 
phase  of  town  economy  to  the  fullest  extent.  But 
metropolitan  proportions  they  never  attained.  They 
were  weak  in  local  trade.  They  were  notable  entre- 
pots, and  ports  of  transit,  but  the  surrounding  district 
never  became  fully  tributary,  never  was  organized 
to  contribute  any  great  surplus  of  products,  or  to 
receive  very  many  foreign  wares  through  the  town. 
Sometimes  the  hinterland  was  restricted  in  area  and 
barren,  sometimes  it  was  inhabited  by  unconquerable 
peoples. 

Perhaps  there  is  one  ancient  city  that  has  reason- 
able claims  to  metropolitan  distinction,  stronger  than 
Babylon's — that  is,  Alexandria  after  the  time  of 
Christ.  The  Mediterranean  gave  it  extended  trade 
and  the  Nile  gave  it  a  rich  basis  or  hinterland,  rich 
it  should  be  urged  but  not  large,  for  though  the  Nile 
was  long  it  was  only  fringed  by  fertile  soil  on  either 
bank,  all  beyond  being  desert. 

For  medieval  towns,  too,  metropolitan  claims  might 


Why  does 
metro- 
politan 
economy 
come  so 
late? 

Babylon 


Phoeni- 
cian and 
Greek 
cities 


Alex- 
andria 


208    INTRODUCTION  TO  ECONOMIC  HISTORY 


Medieval 

Italian 

cities 


Bruges, 

Antwerp, 

1500-76 


1576 


London 
the  first 
typical 
metrop- 
olis 


London 
in  first 
phase, 
1550-1750 


be  made.  Venice,  Genoa,  Florence,  all  Kad  territories 
adjacent  that  were  both  economically  and  politically 
dependent.  Their  extended  trade  was  unquestion- 
ably large.  Much  of  the  machinery  for  carrying  on 
metropolitan  trade  was  there,  wholesalers  and  bank- 
ers in  particular.  Incipient  metropolitan  centers  they 
were,  but  the  extent  of  their  hinterland  was  limited 
and  made  precarious  by  war,  and  their  extended  trade 
was  eclipsed  by  the  discovery  of  new  routes  and  new 
lands  and  the  gradual  shifting  of  emphasis  from  the 
Mediterranean  to  the  Atlantic. 

Bruges  made  a  start  that  was  throttled  by  the 
silting  of  its  harbor.  Upon  Antwerp24  fell  the  mantle 
of  Bruges,  and  for  about  three  generations  it  made 
great  headway,  so  that  Bruges  appeared  but  a  medi- 
eval town.  Full  metropolitan  development  probably 
lay  beyond  Antwerp  because  political  boundaries  made 
it  the  focus  of  but  a  tiny  country.  Its  actual  de- 
stroyer, however,  was  its  government.  Sacked  and 
plundered  by  its  Spanish  masters,  and  with  many 
houses  burned  and  citizens  massacred,  it  lost  its  posi- 
tion of  commercial  leadership  in  the  Low  Countries. 
Amsterdam  aspired  to  the  position  that  Antwerp  lost 
and  as  a  commercial  depot  was  rivaled  only  by  London, 

London  was  the  first  center  to  have  the  happy  com- 
bination of  a  rich  and  populous  hinterland  and  a  great 
extended  trade.  Accordingly,  it  was  the  first  city 
that  not  only  showed  metropolitan  promise  but  actu- 
ally passed  through  all  the  phases  of  metropolitan 
economy  anywhere  to  be  observed.  In  the  case  of 
London,  the  first  of  these  phases  (the  general  organ- 
ization of  the  market),  occupied  the  period  from 
about  1550  to  about  1750.  Other  centers  followed 
both  in  Europe  and  America.  In  the  latter,  the  sea- 
ports leaped  ahead  in  competition  one  with  another 


METROPOLITAN  ECONOMY— ENGLAND        209 

to  organize  the  great  fertile  plains  that  lay  westward. 
And  later  the  towns  of  the  west  arose  to  claim  and 
to  establish  metropolitan  position.  So  that  to-day, 
apart  from  the  south  and  the  Rocky  Mountain  sec- 
tion, metropolitan  economy  is  well  intrenched  in  the 
United  States. 

40.       SECOND  PHASE  :    INDUSTRIAL  DEVELOPMENT. 

Although  the  foundation  of  metropolitan  economy 
was  laid  in  the  general  organization  of  the  market, 
much  remained  to  be  done.  Further  progress  lay  in 
the  development  of  manufactures.  One  of  the  pillars 
on  which  the  metropolitan  structure  rests  is  the  pos- 
session of  a  variety  of  wares,  a  full  store  of  all  com- 
modities which  are  available  and  in  demand.  These 
may  be  secured  in  extended  trade  or  may  be  produced 
within  the  metropolitan  marketing  area,  either  in  the 
metropolis  itself  or  in  the  hinterland. 

It  is  inevitable  that  a  metropolis  like  any  other 
large  city  should  have  manufactures.     The  existence 
of  a  considerable  demand  right  in  the  place   itself  Manu- 
invites  industries.    The  manufacturer  has  small  trans-  f*^ures 
portation  charges  on  his  finished  goods  and  he  can  metrop- 
keep  in  close  touch  with  the  tastes  of  the  consuming  °'19 
public  in  the  metropolis.    Any  surplus  can  readily  be 
disposed  of  elsewhere  by  means  of  the  metropolitan 
marketing  organization.     The  tastes  of  those  outside 
the  metropolis  generally   follow  metropolitan   fash- 
ions, so  that  it  will  not  matter  if  the  manufacturer 
does  send  his  left-overs  into  the  provinces  a  season  or 
so  late.     The  manufacture  of  articles  of  fine  clothing 
and  luxuries  thrives  in  the  metropolis,  women's  cloth- 
ing in  Paris  and  New  York,  men's  in  London  and 
Chicago.     When  knitted  hosiery25  and  fine  coaches 
were  introduced  into  England,  they  were  first  made  in    l6t£  and 
London.    These  are  but  a  few  of  the  many  examples,   turies 


210    INTRODUCTION  TO  ECONOMIC  HISTORY 


Raw 
products 
in  metro- 
polis 

1 8th 
century 

igth  and 
aoth  cen- 
turies 


Indus- 
tries in 
the  hin- 
terland 


1589 

London 
hosiery 
industry 
moves 
to  the 
hinter- 
land 
1620  f. 


1638 

Before 
1808 


1782 


To  the  metropolis  went  raw  products  from  all 
parts.  From  the  standpoint  of  the  manufacturer  it 
was  advantageous  to  be  close  to  the  focusing  point 
of  his  supplies.  A  notable  example  of  this  is  found 
in  sugar  refining  in  London,  meat  packing  in  Chicago, 
and  flour  milling  in  Minneapolis  and  Kansas  City. 
If  no  countervailing  influences  were  at  work,  the 
advantages  of  raw  materials  and  a  consuming  market 
would  make  the  metropolis  as  important  for  its  in- 
dustry as  for  its  trade. 

But  many  of  the  new  industries  that  have  been  set 
up  in  the  metropolis  move  out  into  the  towns  and 
villages  of  the  hinterland.  And  from  time  to  time 
industries  are  started  afresh  in  the  tributary  area, 
avoiding  the  metropolis  entirely.  Accordingly,  we 
are  justified  in  stressing  the  industrial  development 
of  the  district  more  than  that  of  the  metropolitan 
center. 

The  industry  of  framework-knitting,  or  the  mak- 
ing of  hosiery  by  machinery  and  later  lace,  was  first 
introduced  into  London  where  it  flourished  for  over 
a  hundred  years,  but  soon  after  it  was  set  up  there, 
it  began  to  develop  also  in  the  villages26  and  towns 
round  about.  The  finished  product,  for  instance  the 
hosiery  made  in  Norwich,  went  to  London  for  sale  to 
the  merchants  who  exported  it  to  Spain,  France,  and 
Portugal.-7  Two  brothers  in  Nottingham  made 
fine  hosiery,  one  superintending  the  manufacture  and 
the  other  going  on  foot  with  his  samples  to  the  Lon- 
don houses  that  handled  his  wares.28  When  the 
knitting  industry  left  London,  it  gradually  localized 
according  to  its  special  branches,  woolen  hosiery  going 
to  Leicestershire,  cotton  to  Nottinghamshire,  and 
silk  to  Derbyshire,  until  London's  part  in  the  indus- 
try was  negligible."9  One  of  the  causes  for  the 


METROPOLITAN  ECONOMY— ENGLAND        211 

migration  from  London  was  the  restriction  on  the 
number  of  apprentices  that  a  London  knitter  might 
keep.  The  ambitious  knitter  was  anxious  to  employ 
as  many  apprentices  as  possible,  because  he  paid 
them  low  wages,  while  the  rank  and  file  of  the  mas- 
ters, less  ambitious,  sought  through  their  gild  or 
company  to  restrict  the  number  of  apprentices,  after 
the  old-time  practice  of  the  masters  in  town  econ- 
omy. Of  course,  the  laborers,  having  served  their 
apprenticeship,  were  ever  ready  to  enforce  the  restric- 
tion so  advantageous  to  themselves,  by  means  of 
threats,  rioting,  and  breaking  of  machinery.  One 
London  master  who  refused  to  be  bound  down  by 
apprenticeship  limitations,  moved  to  Nottingham 
where  he  employed  at  very  little  cost  to  him-  After 
self,  forty-nine  boys,  many  of  them  being  parish  I7IC 
charges.30 

The  manufacture  of  silk  had  long  been  carried  on 
in  London,  but  it  became  prominent  only  after  Flem- 
ish refugees,  fleeing  from  persecution  by  the  Spanish   1567  f- 
governors,  moved  to  London.     Over  a  century  later   1685  f. 
another  band  of  Protestant  refugees  arrived   from 
France,  so  that  because  of  foreign  skill  in  manufacture 
and  the  great  advantages  of  situation  in  a  metropolis 
the   industry  flourished.     Within   three   generations  London 
the  silk  industry  of  London,  localized  at  Spittalfields,   industry 
was  to  follow  the  general  drift  outward  from  the  moves  to 
metropolis.     Those  living  at  the  time  and  since  have  terland 
ascribed  this  to  the  fixing  of  the  silk-worker's  wage. 
It  was  not  a  minimum  but  an  absolute  wage,  neither  |PJ"sal" 
to    be    lowered    nor    raised    by    individual    masters.  Act  of 
Accordingly,  it  is  said,  the  best  workmen  left  London   1773 
for  places  where  they  could  get  the  high  reward  that 
their  skill  deserved.     And  the  masters  finding  them- 
selves obliged  to  pay  so  much  to  even  the  poorer  help 


212     INTRODUCTION  TO  ECONOMIC  HISTORY 


1824 


likewise  sought  the  provinces.  So  that  it  was  outside 
of  London,  not  in  it,  that  the  best  workmen,  who  are 
always  the  cheapest,  were  found,  and  where  in  time 
the  best  silk  of  whatever  grade  was  made.  Or  we 
may  put  it  another  way:  in  London  the  wages  came 
to  be  really  higher  than  elsewhere.  But  we  must 
not  ascribe  this  simply  to  a  legislative  act,  for  the 
migration  had  begun  before  the  law  had  been  passed 
and  continued  after  it  had  been  repealed.  Never- 
theless, what  London  lost,  Manchester  and  other 
towns  in  the  Midlands  of  England  gained.  So  that 
by  1833,  a  wholesaler  in  Cheapside,  London,  could 
say  that  he  bought  about  as  much  silk  in  Manchester 
as  in  Spittalfields  close  at  hand.31  London  was  giv- 
ing up  some  of  its  manufacture  to  Manchester,  at  the 
same  time  that  it  took  over  the  marketing  of  some  of 
Manchester's  products,  in  the  case  of  the  firm  just 
mentioned,  to  various  parts  of  England,  Scotland, 
and  Ireland. 

The  cutlery  industry  of  London  goes  back  to  the 
stage  of  town  economy.  It  had  a  gild  early  in  its 
history,32  and  though  never  near  the  top  of  the  list 
of  handicrafts,  it  was  also  never  near  the  bottom. 
Comparatively  early,  rural  cutlers  or  bladesmiths, 
imitated  the  London  product.33  By  the  iyth  century 
the  cutlery  industry  was  passing  rapidly  from  the 
metropolis  to  Sheffield.  At  the  same  time  the  Shef- 
field product  was  invading  the  London  market.34 
m  cutlery  jn  ot^er  worcjs>  London  was  giving  up  the  manufac- 
turing for  the  commercial  function.  By  the  iQth 
century,  very  little  cutlery — only  some  very  fine  wares 
—was  made  in  London.  Cutlery  stamped  "London" 
and  bearing  the  London  vendor's  name  was  reallv 
made  in  Sheffield.35  Perhaps  we  should  not  think 
of  the  cutlery  industry  as  really  moving  (frame-knit- 


1328 


1480 

Hinter- 
land 
rivals 
London 


1833 


METROPOLITAN   ECONOMY— ENGLAND        213 

ting  actually  did  move)  from  London  to  Sheffield,  so 
much  as  suffering  from  provincial  rivalry.  Sheffield 
won  because  of  its  local  advantages  in  iron36  and 
water-power.  Trade  restrictions  in  London  seem 
to  have  played  no  particular  part  in  the  decline  of  the 
London  industry. 

Although  the  movement  of  industry  from  the 
metropolis  to  the  villages  and  later  to  towns  was  a  Reasons 
common  phenomenon  and  one  of  great  importance,  forde- 
we  must  let  the  illustrations  already  given  suffice.  zationof 
The  reason  why  industries  leave  the  metropolis,  or  industry 
why  they  flourish  more  in  the  hinterland  than  in  the 
center,  is  that  production  costs  are  lower  in  the  former 
than  in  the  latter.  It  is  cheaper  to  manufacture  cut- 
lery and  other  hardware  in  Sheffield  and  Birming- 
ham because  these  towns  are  nearer  to  the  sources  of 
raw  material  and  fuel,  transportation  costs  accord- 
ingly being  less  than  to  London.  We  find  a  similar 
illustration  in  America.  The  lumber  mills  have  left 
Minneapolis  for  northern  towns,  or  rather  have 
developed  in  the  north  at  Bemidji,  Virginia,  and 
International  Falls,  because  by  cutting  the  logs  in  the 
district  where  they  are  grown  and  by  shipping  only  the 
boards,  freight  is  saved  on  the  waste  timber.  Because 
of  the  high  cost  of  living  in  larger  cities,  wages  tend 
to  be  high  in  a  metropolis.  Only  strong  counter- 
vailing advantages  will  keep  an  industry  in  a  commu- 
nity where  wages  are  high  and  where  for  that  reason 
production  costs  are  excessive.  High  wages  may  be 
due  to  the  high  cost  of  food,  to  the  scarcity  of  labor- 
ers, or  to  such  devices  as  the  Spittalfields  Act.  Labor 
difficulties,  caused  by  strongly  organized  labor  associa- 
tions, likewise  increase  the  costs  of  production  in  so 
far  as  they  force  employers  to  pay  higher  wages,  and 
often  cause  strikes  and  lockouts,  as  costly  to  the  master 


2i4    INTRODUCTION  TO  ECONOMIC  HISTORY 

as  to  the  men.  Often  taxes  are  so  high  in  a  metrop- 
olis that  manufacturers  seek  relief  by  going  either  into 
a  country  village  or  a  manufacturing  town,  where  the 
standard  and  cost  of  living  are  low  and  where  tax 
rates  are  moderate  and  the  assessment  only  nominal 
because  there  are  no  expensive  public  utilities  to  be 
maintained.  We  can  see  how  real  the  differences  in 
cost  were  in  the  case  of  the  shipbuilding  industry.  In 
l833  London  it  cost  about  £10  a  ton  to  build  ships,  while 
for  the  same  quality  of  work  it  cost  only  £8  in  the 
western  part  of  England,  and  for  a  slightly  inferior 
grade  of  work  only  £6  or  £7  in  the  north.37  It  was 
accordingly  inevitable  that  shipbuilding  would  move 
from  London  to  other  places. 

One  way  in  which  the  metropolis  became  commer- 

Hmter-      cj,j  an(j  t^e  hinterland  industrial,  then,  is  by  a  move- 
land  of  .  i  i  • 
London      ment  or  the  industry  from  the  center  to  the  outlying 

Industrial  Parts-  But  the  outlying  parts  developed  industries 
of  their  own,  industries  that  were  never  specially 
identified  with  the  metropolis.  The  textile  manu- 
factures well  illustrate  this.  Early  in  the  career  of 
metropolitan  London,  woolen  cloth  was  being  made 
in  the  villages  and  towns  for  sale  in  London  itself. 
The  industry  developed  from  local  skill  and  models 
but  was  organized  by  clothiers  having  the  needs  of 

l8th  the  London  market  in  mind.     At  a  later  date  the 

century  ,  ...  r  -,-, 

cotton  industry  sprang  up  in  the  northern  part  or  Lng- 
land,  selling  its  products  through  London  at  first,  and 
later  also  through  Manchester-Liverpool.  The  iron 
and  steel  plants  of  the  north  made  hardware  that  was 
finished  in  London  and  machine  parts  that  were  put 
together  there,  whence  they  were,  of  course,  sent  to 
all  parts  of  the  world. 

The  history  of  New  England  well  illustrates  the 
industrial  development   of  the   metropolitan  hinter- 


METROPOLITAN  ECONOMY— ENGLAND        215 


land  and  the  commercial  development  of  the  metro- 
politan center  (Boston) .  At  one  time  boots  and  shoes 
were  made  largely  in  villages  and  towns  for  strictly 
local  use.  Gradually  a  surplus  was  developed  to 
send  to  Boston,  whence  they  were  shipped  to  other 
Atlantic  ports,  to  California  by  boat,  and,  of  course, 
abroad.38  Boston  early  claimed  to  be  the  largest 
shoe  market  in  the  world,39  though  it  had  relatively 
few  shoe  plants  itself.  In  fact  it  had  fewer  makers 
of  shoes  than  it  had  wholesalers  of  shoes.40  In  time 
the  shoe  industry  left  the  villages  for  the  towns,  and 
Boston  became  surrounded  by  industrial  satellites, 
Lynn  with  its  ladies'  shoes,  Brockton  its  men's  shoes, 
Haverhill  and  Worcester  with  their  slippers.  Cotton 
factories  sprang  up  at  Fall  River  and  Lowell,  and 
everywhere  there  were  woolen  centers,  the  most  out- 
standing being  Lawrence.  In  the  case  of  these  tex- 
tile towns  the  advantage  in  their  special  location  lay 
originally  in  cheap  water  power,  for  all  were  situated 
on  the  banks  of  rivers.  And  at  the  service  of  all  New 
England  towns  there  was  the  Boston  market  with  its 
splendid  connections  by  land  and  sea;  and  also  the 
unsurpassed  Yankee  labor,  ingenious  and  persevering. 
A  close  examination  of  the  industrial  development 
of  both  the  metropolis  and  the  hinterland  shows 
clearly  marked  changes  in  organization.  The  old 
town  retail  handicraft  was  giving  way,  not  just  here 
and  there  but  everywhere,  to  the  wholesale  handicraft. 
That  is,  the  artisan  was  coming  to  make  his  wares 
for  sale,  not  by  retail  to  the  consumer  near  at  hand 
but  by  wholesale  to  a  dealer  who  sent  much  or  all  of 
his  ware  to  the  metropolis  there  to  be  disposed  of  to 
retailers  or  to  be  shipped  to  various  parts  of  the 
world.  In  this  wholesale  handicraft  stage  (also 
called  "domestic"),  the  worker  labored  usually  at 


Boston's 

hinter- 

land 

becomes 

industrial 

1  8th 
century 


1857 


1850 


Retail  to 
whole- 
sale 
handi- 
craft 

England 
1 6th 
century 


216    INTRODUCTION  TO  ECONOMIC  HISTORY 


Whole- 
sale 
handi- 
craft 
to  cen- 
tralized 
industry 


Indus- 
trial Rev- 
olution 

Late  i8th 
century 

Early 
1 9th 
century 


Indus- 
trial 
satellites 


home,  aided  by  his  wife  and  children,  a  few  appren- 
tices and  sometimes  a  journeyman  or  two.  When  he 
lived  in  a  village  or  a  small  town,  he  had  a  garden 
and  a  cow,  chickens  and  perhaps  a  horse  and  cart. 
Sooner  or  later,  often  after  having  experienced  periods 
of  prosperity,  such  an  artisan,  or  small  master, 
suffered  very  greatly  in  time  of  depression  and  in 
some  trades  entirely  disappeared. 

In  the  change  from  retail  to  wholesale  handicraft 
we  have  a  good  deal  of  scattering  of  industry,41  its 
location  in  villages  and  small  towns.  In  the  next 
step  we  find  concentration  not  in  the  metropolis  but 
in  industrial  towns,  or  metropolitan  satellites,  located 
in  the  hinterland.  This  was  introduced  by  the  cen- 
tralized system  of  industry  (central  workshop  and 
factory),  wherein  the  workers  were  brought  together 
under  one  roof  to  labor  under  supervision,  and  in  due 
time  to  utilize  power  machinery  in  factory  production. 
The  earliest  factories  were  frequently  located  on 
rivers  and  streams  where  there  was  no  town  at  all. 
These  factories  either  led  to  the  growth  of  towns  on 
the  spot  where  they  located,  or  they  moved  to  indus- 
trial centers  when  water  power  ceased  to  be  vital. 
This  change  leading  to  the  establishment  of  the  fac- 
tory is  commonly  known  as  the  Industrial  Revolution; 
beginning  in  England  and  developing  soon  thereafter 
in  America,  Belgium,  and  Switzerland,  it  has  spread 
to  all  advanced  countries  of  the  world.  It  has  meant 
much  to  economic  life  generally,  but  we  are  here  con- 
cerned with  only  two  results :  the  change  in  the  organ- 
ization of  the  industry,  and  the  creation  and  develop- 
ment of  industrial  satellites,  such  as  we  find  around 
London,  Paris,  Manchester-Liverpool,  New  York, 
Boston,  and  Minneapolis-St  Paul.  These  satel- 
lites are  not  the  industrial  suburbs  of  the  metropolis 


METROPOLITAN  ECONOMY— ENGLAND         217 

but  separate  towns  specializing  in  manufacture  and 
marketing  their  wares  through  the  metropolis. 

This  industrial  phase  in  the  metropolitan  develop- 
ment of  London  fell  within  the  period  from  about  Indus- 
1750  to  about  1830.     In  the  case  of  other  metropol-  |J|j[e 
itan  units  it  came  somewhat  later  and  in  some  parts  in  the 
of  the  world  is  even  now  under  way.     It  involved  the  ^-[°n 
relative  decline  of  London  as  a  manufacturing  center,   develop- 
at  the  very  time  when  the  greatest  changes  were  tak-  London, 
ing  place  in  the  methods  of  manufacturing.  1750-1830 

With  such  developments  taking  place,  we  might 
expect  that  the  interests  of  the  metropolis  would  be  Metro- 
wholly  commercial  and  those  of  the  hinterland  wholly   economy 
industrial,  and  that  there  would  be  a  clear-cut  conflict,   andmer- 
Conflict  there  was,  but  it  was  not  clear-cut,  for  while   jnthe 
the  metropolis  was  pre-eminently  commercial,  it  was   industrial 
also,  as  has  been  seen,  to  a  considerable  extent  indus- 
trial.    So,  while  its  merchants  might  seek  to  break 
down  all  barriers  to  foreign  trade,  its  manufacturers 
might  and  did  seek  protection.     In  short,  the  interest 
of  the  few  manufacturers  of  the  metropolis  and  the 
many    manufacturers    of    the    hinterland    was    iden- 
tical.    The  weavers  of  both  Spittalfields   (London) 
and   Manchester  were   anxious   to   prevent   London 
mercers  from  importing  French  silks.     This  interest 
became   a  plank  in   the  great  national  platform  of 
mercantilism.      This   meant   that   everything   should 
be  done  to  further  manufacture  within  the  nation, 
originally  that  the  nation  might  be  self-sufficing  and 
strong  in  time  of  war,  but  ultimately  so  that  manu- 
factures, being  relatively  expensive,  would  so  increase 
the  value  of  exports  that  there  would  be  a  favorable 
balance  of  trade.     The  nation  was  to  export  valuable 
manufactures   and  import  cheap  raw  materials   and 
accordingly  compel  its  customers  to  send  to  it  large 


218    INTRODUCTION  TO  ECONOMIC  HISTORY 

About  quantities  of  gold  and  silver.  Against  some  of  this 
1700  doctrine  the  metropolitan  merchants  soon  protested, 
1820  but  not  effectively  till  the  early  part  of  the  nineteenth 
century  when  the  manufacturing  hinterland  was 
sufficiently  developed  to  fear  no  foreign  competition. 
Then  and  only  then,  when  the  appeal  was  for  free 
trade  in  order  to  get  cheap  food  for  artisans  and 
laborers,  did  the  metropolitan  merchants  have  their 
way.  In  this  new  policy  both  interests,  commer- 
cial and  industrial,  were  harmonized.  But  through- 
out the  industrial  phase  with  which  we  are  now 
concerned,  the  policy  prevailing  was  still  mercan- 
tilism. 

At  the  very  time  that  mercantilism  reigned,  how- 
Protest       ever,   there   developed   a   policy   of  protest   against 
industrial  excesses    in   manufacture,    against   the   physical   and 
evils          mental  wear  and  tear  involved.     No  human  feeling 
seemed  to  fill  the  breasts  of  the  men  who  organized 
the  Industrial  Revolution.     They  employed  women 
and  children   and   kept   all   their   laborers   working 
long  hours.    They  used  old  and  unsanitary  buildings. 
All  these  practices  were  brought  about  by  conditions 
of  competition,   the  small  amount  of  capital   avail- 
able,  and  the  greed  of  the  new  industrial  masters. 
Mercantilism  protected  the  masters,  as  we  have  seen, 
and  the  new  spirit  of  humanitarianism  arose  to  pro- 
First         tect  the  workers.      First   in    England,   then   on   the 
Factory      Continent  of  Europe  and  in  America,  laws  have  been 
Act,  1801    passed  to  remedy  the  evils  of  employment.     Some 
of  the   Southern  States   of  America,    however,   still 
remain  unregenerate  in  this  respect,  probably  because 
they  are  passing  through  their  Industrial  Revolution 
and  the  masters  feel  the  need  not  only  of  protection 
for  themselves  but  also  of  freedom  to  exploit  their 
employes. 


METROPOLITAN  ECONOMY— ENGLAND        219 

41.     THIRD  PHASE:  DEVELOPMENT  OF  TRANSPOR- 
TATION.    While  the  metropolitan  area  was  develop-  Revolu- 
ing  its  manufactures,  improvements  in  transportation  J^!1 
were   also   being  made,   but   the   most   outstanding  portation 
changes  in  transportation   really   followed  those   in   r°v°^! 
manufacturing.     Or  we  may   otherwise   put   it,   the  tionin 
revolution  in  transportation  followed  that  in  industry.   ' 
But  the  period  of  preparation  for  the  one  was  about 
as  long  as  for  the  other.    As  before,  we  need  to  con- 
sider developments  in  both  the  metropolis  itself  and 
in  the  area  tributary  to  it. 

The  town  under  town  economy  had  been  a  com-  streets 
munity  of  crooked  narrow  streets,  in  which  movement  in*own 
was  hampered  by  stalls  which  projected  out  from  the  tropolis 
stores  and  shops  of  the  tradesmen.    In  ancient  Rome 
(and  Constantinople)    walking  was   difficult,   litters 
and  sedan  chairs  were  often  blocked,  and  carts  and 
carriages  were  not  to  be  thought  of  during  the  day  Late  3d 
time.42     In  Antioch  the  cart  was  so  unpopular  that  "ptury 
Aurelian  did  not  dare  use  one  in  his  entry  into  the 
town.43     Medieval  conditions  were  but  little  better. 
As  the  town  developed  into  a  metropolis,  improve- 
ments had  to  be  made.     Streets  were  widened  and 
straightened,  especially  after  a  great  fire  such  as  took  1666 
place  in  London.     Progress  in  paving  the  streets  was 
slow  but  sure,  necessitated  by  increasing  travel.    And  in  Since  the 
recent  times  transportation  has  been  immensely  facili-  * 
tated  by  electric  street  cars  (on  the  surface,  overhead,   ^n« 
and  underground)  and  now  by  gasoline  motor  vehicles.   1900 

Although  much  more  traffic  is  handled  by  these  new 
means,  there  is,  nevertheless,  even  more  street  con-  Conges- 
gestion  in  the  metropolis  than  there  had  been  in  the  metrop- 
town  under  town  economy.    Indeed,  traffic  is  possible  oli3 
only  by  careful  organization,   one-way  streets,    and 
special  officers  supervising  it  at  the  busy  hours.     In 


about 
1911 


220    INTRODUCTION  TO  ECONOMIC  HISTORY 

spite  of  the  elaborate  plans  and  great  improvements, 
congestion  constantly  prevails  in  certain  parts  near 
the  chief  wholesale  and  retail  sections  of  the  metrop- 
olis. And  it  is  well  known  that  some  metropolitan 
cities  have  suffered  severely  because  of  this  handicap. 
New  York  is  so  badly  off  that  the  delays  and  charges 
involved  in  transferring  wares  have  caused  much 
traffic  to  go  to  such  other  ports  as  Baltimore  and 
Norfolk.  Chicago's  sixty-one  miles  of  underground 
railway  for  handling  freight  have  been  indispensable, 
but  they  are  no  longer  adequate.  And  now  in  very 
Since  recent  years  the  system  of  street  transport  by  means 
of  motor  trucks  has  introduced  the  new  problem  of 
providing  roads  that  will  stand  the  great  strain  of 
heavy  loads.  As  yet  there  is  no  solution,  and  accord- 
ingly we  are  frequently  confronted  with  what  seems 
to  be  and  is  an  anomaly,  that  roads  in  the  great 
metropolitan  centers  are  often  worse  than  those  in 
the  country.44 

Our  main  interest,  however,  is  not  the  roads  in 
the  metropolis  but  those  in  the  country  round  about 
and  in  the  tributary  district  generally,  the  highways 
that  helped  the  process  of  concentration  so  much  in 
the  period  before  the  railroads. 

During  the  stage  of  town  economy,  roads  were 
Country  locally  constructed  and  locally  cared  for,  except  such 
during  as  were  built  for  military  purposes.  The  former 
town  were  good  or  bad  according  to  the  policy  of  the  town 

economy  -n  .  i  i  i  •    n 

or  village,  the  monastery  or  noble,  chiefly  con- 
cerned. Bridges  were  few  in  number  and  river  fords 
both  common  and  dangerous.  The  roads  built  for 
military  purposes  whether  out  of  ancient  Rome  or  out 
of  medieval  London  were  straighter  and  more  solid 
than  purely  local  highways,  and  have  lasted  for  cen- 
turies. An  old  proverb  runs:  All  roads  lead  to 


METROPOLITAN  ECONOMY— ENGLAND         221 


Rome.  In  England  they  led  to  London,  and  in  France 
to  Paris.  This  concentration,  in  large  part  originally 
for  non-economic  purposes,  greatly  aided  metropol- 
itan development  in  Europe,  and  helped  to  decide  that 
Paris  and  London  should  be  metropolitan  centers, 
not  only  in  a  political  but  an  economic  sense;  for, 
over  the  same  road  that  troops  went  to  hold  various 
parts  of  the  realm  in  obedience  or  to  meet  an  invader, 
the  pack  horse,  the  cart,  the  wagon,  and  the  coach 
could  also  go. 

When  trade  began  to  concentrate  in  a  few  great 
centers,  it  became  larger  in  volume  than  ever  before. 
Specialized  carriers,  "common  carriers"  as  they  were 
called,  increased  in  number,  so  that  it  was  easy  to 
hire  some  one  with  a  cart  or  wagon  to  transport 
wares.  The  development  of  the  post  office,  first  for 
official  and  later  for  commercial  purposes,  put  new 
demands  upon  the  roads.  These  new  conditions  were 
met  in  England  in  various  ways.  Laws  were  passed 
to  help  improve  the  roads.  In  general,  the  local 
units,  especially  the  parish,  were  called  upon  to  con- 
struct or  repair  the  highways.  And  often  in  this 
legislation  we  see  how  clearly  the  people  recognized 
that  the  roads  were  overtaxed,  notably  in  the  com- 
mon provision  in  the  laws  that  the  wheels  of  wagons 
should  be  wide  and  that  the  load  carried  should  not 
exceed  a  certain  amount.45 

By  means  of  turnpikes,  old  roads  were  made  over 
and  kept  in  repair.  To  some  person  or  group  of 
persons,  the  privilege  of  repairing  the  road  was  given, 
in  return  for  the  right  to  collect  a  toll  from  those 
who  used  the  road.  The  first  turnpike  in  England 
was  in  the  north  on  the  way  from  London  to  York, 
and  the  second  from  London  to  Colchester.  In  the 
United  States  the  earliest  was  from  Philadelphia  to 


1550-1850 


Roads 
in  the 
metro- 
politan 
hinter- 
land 

1 6th  cent. 

Stage- 
coach 
after 
1600 


1555  f- 


1662-1835 


Turn- 
pikes 

Turnpike 
Act,  1663 

1696 


1792 


222     INTRODUCTION  TO  ECONOMIC  HISTORY 


Work  of 
highway 
engineers 


John 
Metcalfe 
(1717- 
1810) 

Yorks. 

about 

1765 

1792 


Thomas 
Telford 

(i757- 
1839) 


Lancaster,  the  first  lap  on  the  important  highway  to 
the  West.  Although  these  turnpikes  were  far  from 
being  perfect  roads,  they  nevertheless  afforded  great 
relief  to  traffic  and  indeed  displayed  considerable 
advance  in  highway  engineering. 

After  the  need  for  better  highways  had  been  felt 
for  more  than  two  centuries,  and  after  turnpikes  had 
been  built  for  about  two  generations,  there  arose  a 
group  of  road  engineers  who  solved  many  of  the 
problems  of  highway  construction.  The  first  of  im- 
portance was  John  Metcalfe.  Blind  at  the  age  of 
six,  he  nevertheless  led  an  active  life,  as  a  horseman, 
hunter,  and  traveler.  After  years  of  experience  as 
the  owner  and  driver  of  a  stage  wagon,  he  under- 
took the  building  of  a  short  stretch  of  road  in  the 
north  of  England.  Before  he  had  finished,  he  had 
constructed  about  180  miles  of  highway,  all  in  the 
northern  part  of  England.  Much  of  his  work  was 
on  crossroads  which  had  been  neglected  in  favor  of 
the  great  metropolitan  routes.  His  plan  of  construc- 
tion was  simple  and  adequate  for  his  day.  Instead  of 
leaving  the  road  low  in  the  center,  he  made  it  high 
tapering  off  into  the  ditches  at  the  side.  After  laying 
a  firm  base,  he  saw  to  it  that  the  surface  was  smooth. 

Thomas  Telford  also  began  his  work  in  the  north, 
one  of  his  important  lines  being  from  Carlisle  to 
Glasgow.  Later  he  was  employed  on  the  road  lead- 
ing from  London  to  Shrewsbury  and  Holyhead,  used 
by  the  Irish  representatives  when  attending  parlia- 
ment. But  most  of  his  work  lay  in  Scotland  in  the 
building  of  both  roads  and  bridges.  He  always 
emphasized  in  construction  a  heavy  base  or  founda- 
tion. For  the  light  vehicles  of  his  day,  this  was 
heavier  than  was  necessary. 

Best  known  of  all  was  John  L.  Macadam,  who 


METROPOLITAN  ECONOMY— ENGLAND        223 


learned  road  making  in  Scotland,  and  perhaps  a  little 
in  Pennsylvania.  His  work  was  confined  first  to 
Scotland,  then  to  the  area  about  Bristol,  and  finally 
to  the  district  around  London.  He  was  made  sur- 
veyor-general of  the  metropolitan  turnpike  roads. 
Here  he,  and  after  him  his  son,  did  yeoman  service 
in  making  the  roads  really  able  to  bear  the  increasing 
demands  put  upon  them.  He  built  a  lighter  road 
but  one  well  drained  and  able  to  stand  the  traffic  as 
well  as  Telford's.46 

Over  these  improved  roads  went  provisions  and 
other  commodities  in  great  numbers.  Some  of  the 
highways  were  merely  feeders  for  the  seacoast  trade. 
Even  eggs  were  shipped  by  roads,  from  Scotland 
and  the  north  of  England  to  Newcastle,  whence  they 
went  by  steamer  to  London.  So  far  had  the  high- 
ways in  England  been  improved  before  1800  that  a 
plan  was  drawn  up  to  supply  the  metropolis  with 
fish,  by  land  carriage  even  from  distant  seaports  and 
rivers.47 

In  America  we  find  the  same  general  trend  in  high- 
way development  as  in  England.  The  local  roads 
were  locally  constructed  and  maintained.  The  im- 
portant highways  were  at  first  just  Indian  trails  wid- 
ened and  worn  by  traffic.  We  may  note  five  sets  of 
these  main  thoroughfares,  not  all  entirely  distinct 
one  from  another.  From  New  York  City  there  ran 
a  road  to  Albany  (Greenbush)  and  from  there  on 
to  Fort  Schuyler  in  the  Mohawk  Valley.  A  road  ran 
from  Philadelphia  to  Albany  and  from  there,  of 
course,  over  the  same  line  to  Fort  Schuyler.  Accord- 
ingly, both  Philadelphia  and  New  York  had  access 
to  the  fertile  valley  of  the  Mohawk.  Baltimore  had 
n.  road  running  westward  to  the  Monongahela,  and 
Philadelphia  one  going  to  Pittsburgh,  so  that  these 


John 

Macadam 
(1756- 
1836) 


Com- 
mercial 
result  of 
highway 
improve- 
ment 


American 
highways 

Up  to 

1787 


224    INTRODUCTION  TO  ECONOMIC  HISTORY 


i7th  and 
i8th  cen- 
turies 

French 
and 

Prussian 
highways 


1845 


Revived 
interest 
in  high- 
way im- 
prove- 
ment 

About 
1900 

About 
1911 


two  towns  had  connections  with  the  Ohio  and  Mis- 
sissippi Rivers.  Both  Philadelphia  and  Baltimore 
had  roads  running  to  Winchester,  Va.,  and  from  there 
on  through  the  Cumberland  Gap  to  Lexington  and 
Nashville,  and  to  Louisville.  By  this  route  both  the 
Ohio  and  the  Mississippi  Rivers  were  open  to  immi- 
grants and  traders.  In  the  South  the  towns  of  Savan- 
nah, Charleston,  and  Augusta  had  roads  running  north- 
ward. And  parallel  to  the  Atlantic,  but  often  far 
inland,  was  a  route  that  connected  Savannah,  Charles- 
ton, Richmond,  Baltimore,  Philadelphia,  New  York, 
and  Boston.48  Thus  we  see  that  towns,  all  later 
ambitious  of  becoming  great  centers  and  some  of 
which  finally  attained  metropolitan  proportions,  had 
early  laid  broad  foundations  by  constructing  a  system 
of  highways. 

In  France  excellent  highways  were  constructed  at 
the  same  time  that  England  was  remaking  her  roads. 
As  we  have  seen,  they  centered  in  Paris.  In  Ger- 
many activity  began  somewhat  later,  in  fact  about 
a  century  later,  first  in  the  south  and  then  in  the  north. 
Indeed,  the  important  era  in  Prussian  highway  con- 
struction began  about  the  middle  of  the  igth  century 
when  England,  America,  and  France  were  putting  all 
their  energies  into  railroads. 

In  the  2Oth  century,  long  after  our  interest  has 
shifted  from  highways  to  other  means  of  transporta- 
tion, notably  the  railroad,  we  have  now  once  again 
been  compelled  to  consider  the  highway  and  its  im- 
provement. This  has  been  necessitated  by  the  use  of 
motor  vehicles,  at  first  the  passenger  car,  and  then 
the  motor  truck.  For  the  former  a  very  smooth 
surface  is  required;  for  the  latter  a  smooth  and  a 
hard  surface  and  perhaps  a  solid  foundation.49  Mac- 
adam's method  of  roadbuilding  will  meet  only  one  of 


METROPOLITAN  ECONOMY— ENGLAND         225 


the  needs  of  the  motor  truck,  a  smooth  surface.  On 
providing  for  the  needs  of  the  truck  depends  the 
more  complete  development  of  metropolitan  trans- 
portation, not  only  in  the  metropolis  itself,  but  in 
the  tributary  area,  especially  in  those  towns  that  have 
no  other  means  of  transportation  except  by  highway. 
Men  were  somewhat  impressed  with  the  value  of 
motor  trucks  when  France  used  a  fleet  of  them  to 
convey  her  archives  and  offices  from  Paris  to  Bor-  1914 
deaux  during  the  late  war,  but  their  full  value  cannot 
be  appreciated  until  the  highways  are  improved.  Our 
liveliest  imagination  at  present  makes  them  little 
more  than  auxiliaries  to  railroads. 

The  construction  of  barge  canals,  not  railroads, 
followed  improvements  in  highways.  In  the  iyth 
century  two  proposals  were  made  to  connect  Lon- 
don with  Bristol  by  canal,  thereby  cheapening  trans- 
portation between  the  metropolis  and  the  west. 
These  early  projects  were  premature :  the  canal  was 
finished  only  at  a  much  later  date.  It  is  interesting 
to  note  that  the  cost  of  the  final  survey  was  borne 
chiefly  by  some  wealthy  merchants  of  London.50 

Canal  building  in  England  really  began  in  the 
north,  where  highway  improvements  were  also  first 
worked  out.  Early  in  the  iQth  century  there  were 
two  projects  to  connect  the  Trent  (Hull)  with  the 
Severn  (Bristol)  by  canal,  and  the  Trent  with  the 
Mersey  (Liverpool).  The  first  canal  of  the  period 
having  any  economic  importance  was  constructed 
for  the  Duke  of  Bridgewater  by  the  illiterate  engineer, 
Brindley.  This,  the  well-known  Bridgewater  canal, 
ten  miles  in  length,  was  built  to  bring  coal  from  the 
Worsley  mines  to  Manchester.  Then  came  the  Man- 
chester-Liverpool canal  also  constructed  by  Brindley 
for  the  Duke  of  Bridgewater/'1  1776 


Early 

canal 

projects 

around 

London 

1655, 1677 


1789 

1782 

Canals  in 

northern 

England 


1761 


226    INTRODUCTION  TO  ECONOMIC  HISTORY 


Author- 
ized 
1778-1812 

Canals 
around 
London 

About 
1835 


i8th  and 
early  igth 
centuries 

Early 
1 9th 
century 


Finished 
1803  or 
1804 

Canals 

near 

Boston 


Impor- 
tant 

American 
canals 

1825 


Canals  in  plenty  were  built  with  London  as  the 
center52,  though  only  the  Grand  Junction,  running  to 
the  northwest,  was  of  great  importance.  Construc- 
tion went  on  rapidly  in  other  parts  of  England,  so 
that  one  can  say  that  there  came  to  be  three  important 
focal  points  for  canals  other  than  London:  Man- 
chester-Liverpool, Bristol,  and  Hull.53  All  of  these 
places  at  this  time  were  tributary  to  London,  main- 
taining their  connections  with  the  metropolis  by  sea 
as  well  as  by  inland  routes.  Accordingly,  we  may 
regard  the  whole  network  of  canals,  whether  center- 
ing directly  in  London  or  in  Manchester-Liverpool, 
Hull,  or  Bristol,  as  belonging  to  the  metropolitan 
transportation  system  of  London.  But  later,  when 
Manchester-Liverpool  gained  an  independent  stand- 
ing of  its  own,  a  separation  took  place.  In  due  time 
Hull  also  may  become  a  metropolis  and  even  Bristol, 
and  then  a  further  split  will  occur,  if  canals  are  still 
in  use. 

In  America  the  first  canal  of  any  size  or  impor- 
tance was  the  Middlesex  Canal,  twenty-seven  miles 
long,  connecting  Boston  with  the  Merrimac  River.54 
It  was  the  misfortune  of  Boston  to  have  all  the  nav- 
igable rivers  run  directly  to  the  ocean  and  not  into 
her  harbor.  Accordingly,  it  saw  trade  go  up  and 
down  the  rivers  and  the  coast,  without  the  concen- 
tration that  its  merchants  desired.  The  Middlesex 
Canal  did  something  to  bring  trade  to  Boston,  but 
not  very  much,  as  events  proved. 

We  are  more  concerned  with  the  through  canals 
in  America  than  the  purely  local  ones.  Their  history 
begins  with  the  completion  of  the  Erie  Canal,  run- 
ning from  Troy  on  the  Hudson  River  to  Buffalo  on 
Lake  Erie,  and  to  Oswego  on  Lake  Ontario.  New 
York  City,  before  this  canal  had  been  completed, 


METROPOLITAN  ECONOMY—  ENGLAND         227 

had  the  advantage  of  the  navigable  Hudson,  reach- 
ing far  to  the  north,  but  now  it  could  send  its  freight 
by  way  of  river  and  canal  to  Lake  Erie  and  even  to 
Lake  Huron  and  Lake  Michigan.  The  construction 
of  canals  from  Lake  Erie  to  the  Ohio  River,  the 
first  from  Cleveland  to  Portsmouth  and  the  second  1832 
from  Toledo  to  Cincinnati,  opened  up  the  Ohio  Val- 
ley  to  New  York  City.  The  Illinois  Canal,  from 
Lake  Michigan  at  Chicago  to  the  Mississippi  River, 
opened  another  part  of  the  Mississippi  Valley  trade 
to  New  York.  And  finally,  the  Northwest  was  reached 
by  water  from  New  York  when  the  Sault  Ste.  Marie 
Canal  was  completed.  The  work  of  the  financiers,  1855 
engineers,  and  laborers  in  constructing  these  canals 
compares  favorably  with  the  work  of  cabinet  min- 
isters, generals,  and  soldiers  in  extending  political 
boundaries. 

New  Orleans  was  the  only  other  town  in  the  United 
States  that  had  inland  water  connections  comparable   New 

\"       I  ' 

with  New  York's.     But  as  the   I9th  century  neared  "[„! 

its  close,  traffic  on  the  Great  Lakes  was  increasing  ways  vs. 

while  on  the  Mississippi,  the  Ohio,  and  the  Missouri,  Orleans' 
it  was  relatively  decreasing. 

So  great  a  prize  was  not  to  be  left  to  New  York's  Metro- 

undisputed  possession.      Boston  planned  a  canal  to  ^3^" 

Albany,  so  that  it  might  share  the  trade  opened  up  seen  in 
by  the  Erie  Canal.     But  it  found  that  Massachusetts' 


hills  could  be  climbed  better  by  a  railroad  than  by  a 
canal.      The   road   now  known   as   the   Boston   and  1842 
Albany  gave  to  Boston  opportunities  similar  to  those 
of    New    York.     Philadelphia    had    a    mountainous 
hinterland  to  contend  with  but  succeeded  in  construct- 
ing a  combined  canal-and-rail  route   to   Pittsburgh,   l834 
thereby  getting  a  stronger  hold  upon  the  Ohio  Val- 
ley.    It  actually  finished  an  all-canal  route  to  Pitts- 


228    INTRODUCTION  TO  ECONOMIC  HISTORY 


1852 


1853 


Object  of 
building 
canals 


Failure 
of  canals 


1825-29 

Rail- 
roads in 
northern 
England 


burgh,  but  this  was  not  ready  until  an  all-rail  route 
had  been  constructed.  Baltimore,  hoping  to  share 
with  other  growing  metropolitan  centers,  the  trade  of 
Ohio  and  the  other  states  nearby,  sought  a  canal, 
but  had  to  be  content  with  a  railroad. 

We  must  not  think  that  all  these  canals  were 
planned  and  constructed  by  the  metropolitan  centers 
concerned,  though  their  citizens  were  heavy  contrib- 
utors. Most  of  them  were  built  by  the  states,  the 
citizens  of  which  hoped  to  sell  their  wares  in  the 
metropolitan  centers  on  the  Atlantic  coast.  The  peo- 
ple of  Ohio  in  1830  had  only  one  market  for  their 
heavy  produce,  New  Orleans.  By  1842,  however, 
they  had  Boston,  New  York,  and  Philadelphia,  and 
by  !853,  Baltimore  as  well. 

Great  as  had  been  the  hopes  and  expectations  of 
individuals,  towns,  and  metropolitan  centers,  the 
canals,  constructed  so  feverishly  and  at  so  great  an 
expense,  were  on  the  whole  a  failure.  They  have 
been  gradually  superseded  by  railroads,  though  some 
of  them  in  both  England  and  America  are  still  in 
operation.  In  France  and  Germany  they  are  of  much 
more  importance.  The  railroad  has  four  outstanding 
advantages :  it  gives  continuous  service  throughout 
the  year,  while  the  canal  freezes  up  in  the  winter;  it 
is  much  more  rapid  than  the  canal;  it  can  be  built 
over  uneven  and  mountainous  ground  more  cheaply 
and  operated  more  successfully  than  the  canal;  and 
in  most  cases,  without  unloading,  it  can  bring  mer- 
chandise nearer  to  its  destination  than  can  the  canal. 

Although  a  railroad  between  London  and  Birming- 
ham was  talked  of  at  an  early  date,  none  was  con- 
structed till  after  lines  had  been  built  in  the  north. 
The  first  improved  highways,  the  earliest  English 
canals  of  importance,  and  the  first  railroads  were 


METROPOLITAN  ECONOMY— ENGLAND        229 

constructed  in  the  north,  not  independent  of  the 
metropolitan  organization  of  London  but  as  part  of 
it,  for  two  of  the  short  lines  earliest  constructed,  the  1830 
first  running  between  Liverpool  and  Manchester  and 
the  other  between  Liverpool  and  Birmingham,  were 
but  adjuncts  to  the  ocean  or  coast  trade  which  cen- 
tered in  London.  And  yet  these  railroads  were  con- 
structed at  a  time  when  Manchester-Liverpool  was 
gaining  a  measure  of  independence  and  were  ulti- 
mately to  play  a  great  part  in  building  up  the  rival 
metropolitan  organization  of  the  northwest.  Fol-  1837  f. 
lowing  the  London  and  Birmingham  line  came  a  veri- 
table network  of  railroads  with  London  as  the  center, 
a  network  so  fine  that  scarcely  any  places  of  impor- 
tance were  omitted. 

To  the   towns,   large   and  small,    these   railroads  Railroads 
brought  from  the  seacoast  fresh  fish,  hardly  known  ! 
before,  and  from  the  metropolis  luxuries  and  food  of  the 
that  it  could  not  at  once  consume.     To  the  metrop-  j^! 
olis  the  railroads  brought  supplies,  not  only  from  a   unit 
somewhat  wider  area  but  also  from  an  area  more 
completely   exploited,    an    area    which    had    already 
learned  to  commercialize  its  agriculture  to  cater  to 
the  needs  of  town  economy,  but  which  under  metro- 
politan economy  greatly  extended  the  process.     In 
short,  the  influence  of  the  growth  of  the  metropolis, 
and  of  its  impelling  demand  for  food  from  the  hinter- 
land was  reflected  in  agricultural  changes  of  great 
moment.     Towns  under  town  economy  had  pointed 
the  way  to  the  improved  use  of  the  land  through  the 
enclosure  of  scattered  peasant  holdings;  the  metrop- 
olis   did   much   more    to    help    modify   and    change 
methods  of  production  so  as  to  bring  about  a  larger 
surplus  to  supply  the  metropolis  with  food  and  to 
provide  commodities  for  export. 


230     INTRODUCTION  TO  ECONOMIC  HISTORY 


Railroads 
affect 
both  hin- 
terland 
and  ex- 
tended 
trade 

Before 
1856 


Royal 
Danish 
Railway, 
1854 


1832 

Railroads 

around 

Paris 

1842 
1857 


1830 


The  railroad  was  used  to  develop  the  hinterland 
by  making  possible  rapid  and  cheap  transportation. 
It  brought  poultry  and  game  from  Lincolnshire  to 
London,  fish  from  Yarmouth  and  Lowestoft,  and 
cattle  from  the  Midlands.  London  was  not  content, 
however,  with  the  limited  supply  of  her  own  area. 
She  threw  out  her  tentacles  to  draw  into  her  market 
places  and  shops  French  eggs,  Irish  pork,  Dutch  but- 
ter, and  Danish  cattle.  To  secure  the  last-named, 
an  English  company  was  formed.  It  built  docks  at 
an  English  port,  established  a  line  of  swift  steamers, 
and  constructed  a  railroad  from  the  seacoast  into  the 
heart  of  Denmark.55  Some  of  these  tentacles  later 
became  great  arteries  of  inter-metropolitan  trade, 
such  as  the  lines  between  London  and  Manchester- 
Liverpool  and  between  New  York  and  Chicago. 
Indeed,  in  thinking  of  the  railroad  as  a  means  of 
furthering  the  trade  of  the  hinterland  we  must  not 
forget  its  contributions  to  the  traffic  between  metro- 
politan systems. 

In  France  the  first  locomotive  on  a  railroad  ran 
on  the  coal  line  between  St.  Etienne  and  Lyon. 
Within  five  years,  railroads  radiating  from  Paris 
in  four  directions,  were  discussed.  And  soon  a 
national  program  of  railroad  construction  was  drawn 
up  with  Paris  as  the  center  for  all  lines,  except  the 
southern.  Six  big  companies  finally  operated  six  sec- 
tions of  a  network,  much  as  they  exist  to-day.  Paris, 
like  London,  and  we  may  add  Chicago,  is  the  stop- 
ping place  for  railroads.  They  run  into  it  and  out 
of  it  but  not  through  it.  This  fact  makes  the  business 
of  transshipment,  quite  apart  from  the  sale  of  goods, 
a  matter  of  importance. 

The  era  of  railroad  construction  in  New  England 
began  fairly  early  but  none 'too  soon  to  save  Boston 


METROPOLITAN  ECONOMY— ENGLAND        231 


from  sinking  into  comparative  insignificance.  Boston 
had  no  Hudson  River  and  no  Erie  Canal.  It  was  a 
seaport  driving  a  brisk  trade  with  various  lands  far 
and  near,  but  its  extended  trade  could  not  expand 
any  or  much  farther  without  development  of  the 
hinterland  basis  of  supply.  In  other  words,  the  tree 
of  extended  commerce  had  not  taken  deep  root  in 
the  soil  of  hinterland  trade.  The  railroad  came  to 
the  rescue  of  Boston  and  turned  the  pessimism  of 
the  Yankee  town  into  optimism  and  new'  activity. 
Soon  Boston  was  connected  with  Lowell,  Providence, 
and  Worcester.  Wider  rail  connections  were  made 
as  soon  as  possible,  with  Albany  and  the  West,  and 
with  New  York  City.  Before  the  Civil  War  broke 
out  the  network  was  substantially  complete.  Boston 
could  boast  of  six  lines  to  the  West  all  independent 
of  her  great  rival  New  York.58  And  soon  its  boast 
was  even  louder  that  it  was  unsurpassed  among 
Atlantic  ports  as  a  converging  point  for  railroads.57 
The  story  of  railroad  construction  around  the  other 
metropolitan  centers  in  America  is  similar  to  that  of 
Boston.  No  matter  whether  the  lines  received  state 
or  federal  aid,  whether  the  capital  was  American  or 
foreign,  whether  the  lines  were  constructed  locally 
to  join  town  with  town,  or  whether  the  engineers 
were  metropolitan  in  outlook,  the  result  was  all  the 
same.  Ultimately,  the  lines  formed  networks  round 
about  the  metropolitan  centers  which  they  were  help- 
ing to  create.  A  study  of  the  railroad  guides,  Moody's 
or  Poor's,  shows  how  markedly  this  has  taken  place, 
and  an  examination  of  the  names  of  the  roads  them- 
selves shows  that  the  officials  were  not  slow  in  seeing 
the  importance  of  metropolitan  concentration.  New 
York  has  its  New  York  Central  and  Hudson  River 
Railroad  to  Buffalo  and,  by  means  of  controlled  lines, 


Boston 
railroads 

1835 


1842 
1849 

1855 
1880 


Metro- 
politan 
railroad 
nets 


232    INTRODUCTION  TO  ECONOMIC  HISTORY 

through  to  Chicago;  its  New  York  and  Erie  to  Lake 
Erie  and  beyond;  its  New  York,  New  Haven,  and 
Hartford  to  Boston;  and  so  on.  Similarly  with 
Philadelphia  and  Baltimore.  But  the  most  outstand- 
ing illustration  is  Chicago  which  is  the  focal  point 
for  so  many  lines,  perhaps  a  score,  bearing  the  word 
Chicago  in  their  official  titles. 

Most  of  the  men  who  backed  the   construction, 

Railroad    and  later  the  consolidation  of  these  lines,  were  humble 

builders  citizens  of  their  communities  who  hoped  to  gain  more 
from  their  business  through  better  railroad  facilities 
and  perhaps  to  receive  dividends  from  the  railroad 
stocks  that  they  purchased.  Only  a  few  railroad 
magnates  are  well  known.  The  Vanderbilts  and 
Goulds  of  New  York,  and  Hill  of  St.  Paul,  are  per- 
haps the  most  widely  identified  with  railroad  con- 
struction and  consolidation,  though  Morgan  and 
Harriman  stand  hardly  second  because  of  their  activ- 
ities in  railroad  finance. 

The  same  mechanical  power  that  made  the  rail- 
road a  success  made  the  steamship  possible.     After 

Steam-       steam    had    demonstrated    its    power    in    stationary 

p8         engines,  it  was  used  in  steamships  and  locomotives. 

Although   there   had  been   more   or   less    successful 

1807  experiments  made  with  steamboats  before  the  Cler- 
mont  started  from  New  York  to  Albany,  none  was 
followed  by  the  establishment  of  regular  traffic.  For 
a  period  in  America  these  steamboats  were  success- 
ful as  ferries  and  on  rivers  where  the  current  was 
not  strong,  but  it  was  only  after  1816  that  they  were 
powerful  enough  to  ascend  rapid  currents.  Their 
usefulness  was  then  demonstrated,  and  at  that  time 
began  the  era  of  steamboating  on  the  Mississippi — 
described  by  Mark  Twain — and  of  course  on  other 
rivers.  The  American  ship  Savannah  has  the  credit 


METROPOLITAN  ECONOMY— ENGLAND        233 


of  being  the  first  to  use  steam  in  crossing  the  Atlantic, 
but  it  was  chiefly  a  sailing  vessel  and  was  shortly 
afterwards  made  over  as  such.  Vessels  seeing  the 
smoke  issuing  from  the  Savannah  thought  it  on  fire, 
and,  it  is  reported,  a  British  man-of-war  actually  sent 
a  boarding  party  to  extinguish  the  flames.  The  Can- 
adian Royal  William  and  the  British  Great  Western 
and  Sirius  demonstrated  the  possibilities  of  trans- 
oceanic traffic  by  steam.  As  these  and  later  improved 
ships  came  into  the  harbors  they  were  enthusiastically 
received.  Their  home  ports  were  proud  of  them  and 
took  an  interest  in  them  perhaps  even  greater  than 
that  of  Southampton  in  the  Oceanic,  Liverpool  in 
the  Manretania,  and  New  York  in  the  Leviathan  in 
our  own  day.  In  due  time  the  wooden  ship  gave  way 
to  the  iron,  and  that  to  the  steel;  and  the  side  wheels 
to  the  screw  propeller,  in  all  of  which  the  British  were 
the  leaders.  Not  in  all  cases  the  inventors  of  these 
improvements,  the  British  were  nevertheless  the  first 
to  use  them  on  a  large  scale.  And  to  this  is  due  in  part 
at  least  their  maritime  dominance  in  the  world  today. 

In  the  establishment  of  transatlantic  service,  ad- 
vantage was  taken  of  the  larger  and  more  continuous 
trade  between  metropolitan  centers.  It  is  evidence 
of  the  growing  importance  of  Liverpool  that  the 
Savannah  and  other  early  steamers  went  to  that  port 
and  not  to  London.  Of  course,  it  was  the  American 
trade  which  was  largely  responsible  for  the  develop- 
ment of  independence  in  the  northern  metropolis, 
Manchester-Liverpool.  The  other  outstanding  port 
in  Great  Britain  was  Glasgow. 

At  the  same  time  that  the  steamship  was  demon- 
strating its  superiority  in  speed,  economy,  and  relia- 
bility, over  the  sailing  vessel,  there  were  formed 
transatlantic  lines  in  great  numbers,  each  operating 


1819 


1921 


Steam- 
ships and 
inter- 
metro- 
politan 
trade 


Atlantic 
lines 
connect 
metro- 
politan 
market- 
ing sys- 
tems 


234    INTRODUCTION  TO  ECONOMIC  HISTORY 

a  fleet  of  ships  and  directly  or  indirectly  linking  up  the 
great  metropolitan  marketing  systems  of  the  world. 
The   early   British   lines   were   the    Cunard,   Inman, 
1840-71      Allan,  Anchor,  and  White  Star.     The  chief  German 
1856, 1859  lines  were  the  Hamburg-American   and  the   North 
German-Lloyd.     The  chief  French  was  the  Trans- 
1863          atlantic.     There  had  been  transatlantic  lines  before 
the  days  of  the  steamship,  but  they  were  not  generally 
successes.     Before  the  American  Revolution  the  Fal- 
mouth  Line  had  begun,  running  from  Falmouth,  Eng- 
land, to  New  York.     After  the  Revolutionary  War 
a   French   line   had  been   established   with   monthly 
sailings  to  New  York.     It  failed  because  America's 
trade  remained  with  England  even  after  the  War  of 
Independence.    The  Black  Ball  Line  of  packet  ships, 
1816          formed  to  connect  Liverpool  and  New  York,58  was 
apparently  the  first  American  company  to  have  met 
success  before  the  time  of  the  great  British  lines. 

The  parcel  dispatch  service  must  not  be  omitted 
Parcel        in  any  consideration  of  means  of  transportation  in 
dispatch     tjie  metr0p0ijtan  period.     Although  it  made  use  of 
the  improved  highways,  the  railways,  and  the  steam- 
ships, it  nevertheless  antedates  them  all.     In  Austria 
About        and  France,  packages  had  been  carried  by  the  post 
1650          office  at  a  relatively  early  date,  but  the  parcel  post 
so  important  in  our  day  was  not  instituted  till  much 
later,  in  Hungary  in  1850,  in  Germany  in   1871,  in 
France,  Italy,  and  the  Netherlands  in  1881,  in  Great 
Britain  in  i883,59  and  in  the  United  States  in  1913. 
In  most  countries  there  are  private  express  companies 

1839  carrying  packages.    In  America,  Harnden  established 
a  parcel  post  service  between  Boston  and  New  York; 

1840  a  little  later  Philadelphia  and  Albany  were  added; 
then  Buffalo,  Chicago,  Cincinnati,  St.  Louis,  and  so 

1858          on  till  the  Pacific  Coast  was  finally  reached.60     Al- 


METROPOLITAN  ECONOMY— ENGLAND        235 

though  Harnden  began  carrying  the  packages  himself, 
usually  servants  were  employed.  As  soon  as  possible 
railroads  were  used  instead  of  coaches.  Harnden 
was  anxious  to  develop  the  express  service  between 
America  and  Europe  at  the  very  time  that  others 
were  turning  from  the  foreign  to  the  more  profitable 
domestic  trade.  Accordingly,  it  was  to  be  expected 
that  sooner  or  later  Harnden's  business  would  be 
surpassed  by  that  of  others.  In  fact,  it  was  merged 
into  the  Adams  Express  Company,  which  in  turn  1854 
joined  three  other  concerns,  under  the  guiding  hand 
of  the  government,  to  form  the  American  Railway  1918 
Express  Company.61 

The  express  company  and  parcel  post  have  greatly 
aided  metropolitan  concentration.     Retailers  in  small  Parcel 
towns  are  able  to  get  a  steady  supply  of  goods  in  ^n™ 
small  quantities,  so  as  to  save  in  the  amount  of  capital  metro- 
invested  in  goods  and  storage  space.    But  these  same  j^.3" 
retailers,   notably   in  America62   and   Great   Britain,   keting 
look  upon  the  parcel  post  with  no  friendly  eye  when 
they  see  it  used  by  their  customers  to  purchase  goods 
from  the  big  mail-order  houses  in  the  metropolitan 
centers.      If   such  a  business  should  develop   to   its 
logical  conclusion,  the  dependence  upon  the  metrop- 
olis of  individuals  located  in  the  hinterland  would  be 
more  and  more  direct. 

Important  as  has  been  the  work  of  the  private 
express  companies,  it  has  been  the  post  office  that  has   Post 
made  parcel  dispatch  cheap  and  within  the  reach  of 
all,  whether  in  town  or  country.     But  apart  from  its   politan 
service  to  parcel  dispatch  the  post  office  has  played 
an  important  role  in  metropolitan  concentration,  espe- 
cially  in   the   transportation   of   letters,   newspapers 
with  their  commercial  news  and  advertisements,  and 
trade  circulars. 


236    INTRODUCTION  TO  ECONOMIC  HISTORY 


General 
devel- 
opment 
of  the 
post  office 


Prince  of 
Turn  and 
Taxis, 
1595 


1509 

English 
post  office 
1550 

1637 


1637 
1638 


1837 
1883 
1509-1784 

178410 
1830*8 


The  post  office  has  had  a  long  history.  In  the 
ancient  period  it  was  maintained  by  kings  and  em- 
perors for  political  purposes  only.  In  the  Middle 
Ages,  courts,  monks,  towns,  knightly  orders,  univer- 
sities, and  craft  gilds,  had  messengers  for  their 
own  correspondence.  At  first  the  official  post  offices 
in  western  Europe  carried  only  government  dis- 
patches, but  gradually  they  were  opened  to  private 
correspondence  and  small  packages.  A  nobleman  was 
appointed  to  the  position  of  imperial  postmaster,  an 
office  which  was  made  hereditary  in  the  family.  This 
was  by  way  of  reward  for  long  and  faithful  service 
in  making  the  post  office  international  (between  Ger- 
many, the  Netherlands,  Spain,  France,  and  Italy), 
and  for  developing  it  into  a  public  service  for  the  use 
of  all.63 

In  England  there  was  a  Master  of  the  Posts  at 
an  early  date.  The  post  from  two  important  centers, 
London  and  Antwerp,  took  about  four  days — that  is, 
by  horse  and  boat.  Private  agencies  were  prohibited 
from  carrying  the  mails,  so  that  the  government  had 
a  monopoly.  At  this  time  the  merchants  of  London 
were  using  the  post  office  and  took  occasion  to  express 
their  satisfaction  with  the  service  one  of  the  officials 
had  rendered  them.64  Arrangement  was  at  length 
made  whereby  private  letters  would  be  carried  at  a 
fixed  rate,  so  that  at  this  point  we  may  regard  the 
post  office  as  finally  and  definitely  a  public  service  in 
England. 

Money  orders  were  taken  over  by  the  post  office 
and,  as  we  have  seen,  the  parcel  post  service.  At  first 
the  post  office  used  post  horses,  then  for  a  period  the 
mail  coaches,  driven  rapidly  over  the  improved  high- 
ways, and  finally  the  railways.  It  is  impossible  to 
estimate  the  influence  the  post  has  had  in  the  direc- 


METROPOLITAN  ECONOMY— ENGLAND        237 


tion  of  commercial  concentration  in  London.65  For 
a  long  time  that  was  the  only  center  of  the  service, 
and  of  course,  it  has  always  remained  overwhelm- 
ingly the  most  important  focusing  point.  The  metro- 
politan merchant,  shipper,  broker,  banker,  could 
write  to  his  agents,  send  them  money  and  parcels, 
and  receive  replies  and  corresponding  returns  in 
goods  and  money  in  a  short  time. 

In  America  the  post  office  has  developed  in  some 
respects  the  same  as  in  England,  in  other  respects 
differently.  It  was  different  in  so  far  as  it  grew  up 
locally  in  the  various  colonies,  centering  in  Boston, 
in  Philadelphia,  and  so  on.  In  due  time  there  was 
appointed  a  single  postmaster  for  the  American 
colonies.  Benjamin  Franklin,  who  had  been  the  post- 
master of  Philadelphia,  and  one  of  the  deputy  post- 
masters for  the  colonies,  became  the  first  postmaster- 
general  of  the  United  States.  Following  such  reforms 
as  the  introduction  of  adhesive  stamps,  prepayment 
of  postage,  the  elimination  of  the  element  of  distance 
in  postal  rates,  and  especially  the  reduction  to  two 
cents,  of  the  cost  of  sending  the  average  letter,  the 
post  office  has  gradually  grown  in  service  and 
popularity. 

As  the  metropolitan  centers  developed  in  the 
United  States,  the  post  office  inevitably  swung  into 
line,  partly  as  cause  and  partly  as  result.  In  this 
system  state  boundaries  are  neglected  except  as  a 
convenience  for  addresses,  but  concentration  of  postal 
service  in  the  large  cities  of  the  North  and  West  is 
increasing  more  and  more.  Between  these  centers  a 
very  rapid  service  has  been  established.  So  pressing 
is  the  need  for  speed  that  an  air  route  has  been 
arranged  between  New  York  and  Washington,  New 
York  and  Cleveland,  and  Cleveland  and  Chicago  (and 


London 
as  postal 
center 

To  1741 


Post 
office  in 
America 
1639 


About 
1692 


1775-76 

1847,  1855 

1863 

1883 


American 
post 

office  and 
metro- 
politan 
service 


238    INTRODUCTION  TO  ECONOMIC  HISTORY 

even  on  to  San  Francisco),  cutting  the  time  of  trans- 
portation by  from  one-half  to  two-thirds.66 
Tele-  Fast  as  such  service  is,  the  telegraph,  cable,  tele- 

graph       phone,  and  wireless,  have  accustomed  us  to  think  of 
it  as  slow.     The  telegraph,  a  German  invention,  has 
Morse,       ^een  maje  practical  by  an  American.    The  first  tele- 
graph line  in  the  United  States  was  built  between 
1844          Washington  and  Baltimore  by  federal  aid.     Private 
initiative  soon  hastened  to  link  up  the  large  cities, 
1845,1848  New  York  to  Philadelphia,  New  York  to  Chicago, 
1861  and  finally  to  the  Pacific.     The  first  practical  cable 

1849  was  laid  in  a  German  harbor,  and  soon  one  crossed 

1850  the  English  channel  connecting  London   and  Paris, 
and  then  the  Atlantic  was  spanned.     The  first  At- 

l858          lantic  cable  laid  between  Ireland  and  Newfoundland 

1865  soon  played  out,  and  the  second  one  snapped,  so  that 

1866  about  eight  years  elapsed  before  the   (third)   cable 
was  in  final  operation.67    At  the  same  time  that  Paris, 
London,    and  New   York,    and  other  metropolitan 
cities  were  being  linked  up,  their  respective  tributary 
districts  were  being  spread  with  a  network  of  wires. 

As  in  the  case  of  all  other  means  of  transportation 
Tele-         (whether  of  goods  or  ideas),  concentration  of  the 
!^p          telegraph  and  similar  services  took  place  in  the  large 
metro-       centers.    A  mistaken  theory  makes  the  telegraph  the 
economy     creator  of  a  world  market.     It  has  created  world 
marketing  potentialities,  but  that  does  not  mean  much. 
It  strikes  the  imagination  when  we  think  of  news, 
commercial  or  otherwise,  being  flashed  from  Paris 
to  New  York,  Hongkong  to  London.     The   daily 
fluctuations  on  the  Liverpool  cotton  market  are  re- 
flected on  the  New  York  market;  and  of  the  Chicago 
wheat  market  on  the  London  market.    All  this  simply 
means   a  better   organization    of   inter-metropolitan 
trade.     A  juster  view  would  be  that  these  improved 


METROPOLITAN  ECONOMY— ENGLAND         239 

means  of  transportation  help  the  intra-metropolitan 
trade  as  much  as  they  do  the  inter-metropolitan.  Soon 
after  being  established  in  England,  the  telegraph  was 
regarded  as  a  means  of  diffusing  knowledge  of  the 
state  of  trade  in  all  parts  of  the  country  and  as 
specially  helpful  when  London  had  more  perishable 
foods  than  it  could  consume,  foods  which  perhaps 
Birmingham  and  Sheffield  needed  badly.  With  the 
incoming  of  the  telegraph  we  may  truly  say  that  the 
metropolis  had  become  more  than  ever  before  the 
nerve  center  of  modern  commerce. 

In  contemplating  the  convenience  of  modern  trans- 
portation, its  rapidity,  cheapness,  and  certainty,  we 
often  forget  one  aspect  of  deep  significance.     These 
new  services,  these  common  carriers,  of  foods  or  let-  Metro- 
ters,  of  wares  or  messages,  leave  the  merchant  and  spedaH- 
others  free  to  specialize  in  their  main  lines  of  business,   zation 
The   common  warehouseman   stores   the   merchant's 
products,  the  common  carrier  transports  them,  the 
banker  oils  the  machinery  of  commerce,  while   the 
merchant   or   manufacturer   devotes   all   his   capital, 
energy,   and   special  skill  to  his   one  line   of  work. 
Such  specialization  is  the  very  stuff  of  which  metro- 
politan economy  is  made,  and  is  to  be  compared  with 
the  earlier  division  of  employments  between  retailer, 
jobber,  wholesaler,  and  manufacturer. 

Although  metropolitan   economy  may  not  be   re- 
garded as  complete,  it  is  nevertheless  well  developed,   Well-de- 
mature    not    finished,    when    transportation    is    well  ^et™- 
organized  and  when  specialization   of  function  has  politan 
taken  place  between  metropolis  and  tributary  area 
and  between  merchant,  manufacturer,  warehouseman, 
carrier,  and  the  like.     We  feel  at  this  point  that  the 
economic  methods  and  mechanical  devices  are  suffi- 
ciently well  established  to  permit  in  the  course  of  a 


240    INTRODUCTION  TO  ECONOMIC  HISTORY 

few  generations  the  development  of  .metropolitan 
economy  in  all  parts  of  the  world  where  the  physical 
features  will  allow  it.  Inland  centers  are  no  longer 
under  the  insuperable  handicap  that  they  have  suf- 
fered from  in  the  past.  Although  it  is  still  probably 
true  that  every  well-developed  metropolis  is  situated 
on  navigable  water,  nevertheless,  the  future  may  have 
a  very  different  situation  to  present. 

At  this  point  we  may  briefly  review  the  transporta- 

Summary   tjon  pnase  of  London's  metropolitan  development. 

London,     The  period  we  may  place  roughly  at  about  1830-1890. 

1830-90  Although  much  earlier  than  this,  there  had  been 
efforts  at  highway  regeneration,  and  although  the 
post  office  had  been  established,  first  for  government 
service  and  later  for  public  use,  in  both  cases  center- 
ing in  London,  although  stage  coaches  ran  from  Lon- 
don to  all  the  important  towns,  and  although  there 
had  been  real  improvement  in  transportation  by 
means  of  canals  and  better  constructed  highways, 
nevertheless  the  real  beginning  of  the  third  phase 
came  with  the  railroad  era.  At  first  built  in  the  north, 
the  railroads  really  supplemented  the  trade  with  the 
metropolis  in  so  far  as  they  connected  inland  points 
with  the  coast  trade  centering  in  London.  Soon 
practically  all  the  important  railroad  lines  focused  on 
the  metropolis.  This  meant  that  the  hinterland  was 
truly  bound  to  the  metropolis  by  bands  of  steel,  the 
rails  of  the  new  roads.  Contemporaneous  with  rail- 
road construction  came  the  building  up  of  over-sea 
traffic  on  a  new  and  regular  basis  by  means  of  the 
steamer.  We  may  say  roughly  that  what  was  done 
for  London's  hinterland  trade  by  the  railroad  was 
done  for  its  extended  trade  by  the  steamship.  The 
two,  of  course,  are  but  parts  of  the  same  mechanism. 
With  Sheffield  cutlery,  Lancashire  cottons,  and  York- 


METROPOLITAN  ECONOMY— ENGLAND         241 

shire  woolens,  London  could  buy  American  tobacco, 
Canadian  furs,  East  Indian  spices,  and  China  tea. 
By  means  of  the  post  office,  telegraph,  telephone, 
and  cable,  London  has  been  linked  with  its  hinter- 
land and  has  kept  in  close  touch  with  much  of  the 
rest  of  the  world. 

That  this  high  state  of  metropolitan  development  National 
should  be  reflected  in  a  new  national  economic  policy  ^^^ 
is  to  be  expected.     That  the  groups  of  persons  re-  faire 
sponsible  for  rapid  transportation,  large-scale  manu- 
facture, and  wholesale  trade  should  come  to  champion 
this  new  policy   is   inevitable.     The  policy  itself   is 
commonly  called  laissez-faire  or  economic  liberalism. 
The  fact  that  it  bears  both  a  French  and  an  English   i8th 
name  testifies  to  its  more  or  less  independent  develop-  * 
ment  in  both  countries. 

In  this  policy  of  economic  liberalism  or  economic  Metro- 
freedom,  metropolitanism  came  into  its  own,  so  that,   f^^nd 
all  the  adjustments  of  the  first  two  phases  of  metro-  national 
politan  economy  having  been  made,  there  could  be  an   coincide 
untrammeled  development  of  purely  economic  life. 
Commercialism  was  to  reign  supreme.     International 
commercial   considerations    were    to   be    uppermost. 
The  national  boundaries  like  the  national  preposses- 
sions having  been  reduced  to  a  minimum,  the  way  was 
cleared   for   the   growth   of   inter-metropolitan    and 
intra-metropolitan  trade.     Since  industries  had  been 
well  developed  and  trade  had  been  widely  extended, 
monopoly  was  no  longer  necessary  or  advantageous. 
It  was  to  be  expected  under  such  circumstances  that 
the  work  of  the  manufacturer  and  of  the  middleman 
would  be  fully  appreciated  because  complete  reliance, 
under  the  regime  of  economic  liberalism,  was  to  be 
placed  upon  these  private  business  men  to  supply  all 
human  material  wants  on  their  own  initiative.     First 


242     INTRODUCTION  TO  ECONOMIC  HISTORY 

understood  perhaps  by  the  magistrates  of  the  metrop- 
olis, this  public  service  came  to  be  carefully  formu- 
lated by  economic  theorists68  until  it  became  the 
dogma  alike  of  schoolboys  and  statesmen :  laissez- 
faire  or  let  do — let  the  entrepreneur  go  ahead  and 
plan  and  execute,  for  in  serving  his  own  best  interests 
he  will  best  serve  the  public. 

Third  When  the  third  phase  of  metropolitan  economy 

metro-°f  nas  keen  reached  by  any  metropolitan  unit,  there  is 
poiitan  a  powerful  argument  for  the  laissez-faire  system, 
invites17  unless  there  are  special  factors  working  in  the  oppo- 
laissez-  site  direction.  When  this  phase  has  been  reached, 

f     »  *. 

the  marketing  system  is  already  well  organized  on  a 
wide  basis;  the  manufactures  have  progressed  so 
far  that  they  have  little  fear  of  competition;  and 
the  elaborate  system  of  transportation  calls  for  more 
complete  utilization  of  existing  facilities.  England 
1776-1860  was  the  first  to  reach  this  phase  and  to  develop  the 
1850-70  laissez-faire  system.  Then  came  France  with  other 
countries  following  wholly  or  in  part.  In  America 
the  movement  towards  freer  trade  was  strong  in  the 
1840-60  age  of  improved  highways,  canals,  steamboats,  and 
railroads.69  It  died  out  there  when  the  chief  concern 
became  the  development  of  new  metropolitan  units 
far  inland  from  the  Atlantic  coast  and  when  the  great 
expense  incurred  during  the  Civil  War  seemed  to 
make  necessary  a  tariff  for  revenue  purposes.  In 
other  countries,  too,  there  has  been  a  partial  retro- 
gression to  mercantilism  under  the  name  of  protection. 
France  has  gone  back  because  her  products,  not  being 
staple  wares,  cannot  successfully  compete  with  those 
of  other  countries.  And  France  and  other  countries 
have  given  up  their  laissez-faire  system  at  least  in 
part  in  order  to  be  self-sufficing  and  strong  politically 
or  to  raise  a  revenue  from  customs.  Even  England 


METROPOLITAN  ECONOMY— ENGLAND        243 


under  the  cloud  of  an  exclusive  imperialism  has  been 
threatened  with  a  return  to  a  protective  system.  All 
this  illustrates  the  fact  that  purely  economic  consid- 
erations do  not  long  stand  unchallenged  by  political 
forces.70  If  nationalism  and  imperialism  ever  dis- 
solve, then  free  trade,  the  policy  of  the  well-developed 
metropolitan  unit,  will  likely  prevail  in  the  world. 

42.  FOURTH  PHASE:  DEVELOPMENT  OF  FINAN- 
CIAL ORGANIZATION.  It  is  to  be  expected  from  the 
nature  of  things  that  the  metropolis  will  develop  its 
financial  resources  to  the  limit,  to  care  for  both  the 
extended  and  the  hinterland  trade,  the  inter-metro- 
politan commerce  and  intra-metropolitan  commerce. 
As  the  general  organization  of  the  market  is 
completed,  the  manufactures  developed,  and  trans- 
portation facilities  built  up,  a  metropolitan  finan- 
cial system  is  constructed,  but  the  full  measure 
of  growth  in  metropolitan  finance  comes  later  and 
may  be  said  to  constitute  a  fourth  phase  in  the  evolu- 
tion of  metropolitan  economy. 

At  first  sight  it  might  appear  that  there  is  no  solid 
reason  for  speaking  of  a  financial  phase  of  metro- 
politan economy  as  distinct  from  the  other  phases. 
It  might  be  claimed  that  banking  is  but  the  hand- 
maid of  commerce  and  when  we  have  treated  of 
commerce  (including  here  general  market  organiza- 
tion, manufacture,  and  transportation),  we  have 
finished  the  story.  But  this  would  appear  not  to  be 
the  case,  for  banking  is  itself  a  great  power  in  the 
land,  helping  to  create  as  well  as  supplementing  the 
business  of  commerce.  Once  banks  have  arisen  to 
aid  in  the  exchange  of  goods,  they  can  in  turn  pro- 
foundly affect  that  exchange — not  against  the  tides 
of  business  needs  and  local  capacities  but  within  those 
needs  and  capacities.  The  influence  of  capitalists  and 


Financial 
devel- 
opment 
begins 
early  but 
matures 
late 


Question 
of  a  sep- 
arate 
financial 
phase 


244    INTRODUCTION  TO  ECONOMIC  HISTORY 

money  middlemen  is  often  taken  as  the  distinguishing 
mark  of  our  present  economic  organization.  These 
two  classes,  capitalists  and  money  middlemen,  do  not 
simply  loan  and  then  stand  aside,  but  they  suggest 
consolidation,  retrenchment,  and  expansion.  In  short, 
they  direct  an  increasingly  large  share  of  the  general 
business  operation  within  the  hinterland  and  outside. 
Date  When  this  financial  influence  becomes  sufficiently 

financial  distinct  to  justify  our  isolating  it  and  marking  off  a 
phase,  new  phase  is,  of  course,  a  matter  of  opinion.  We 
°^  to"day  are  so  near  to  the  event  that  our  judgment 
is  not  so  good  as  that  of  later  generations.  Some- 
thing is  to  be  said  for  the  year  1890  as  a  rough 
approximation  to  the  beginning  of  the  financial  phase 
of  London's  development.  The  transportation  phase 
had  practically  closed,  as  far  as  railroads  were  con- 
cerned, and  nothing  else  in  transportation  showed 
more  than  promise.  The  banking  capital  of  the 
metropolis  from  about  1890  onward  was  increasing 
more  rapidly  than  that  of  the  provinces  or  hinter- 
land. It  took  the  war  of  1914-18,  however,  to  bring 
to  a  head  some  of  the  forces  long  under  way,  espe- 
cially the  conscious  active  encouragement  of  business 
in  both  extended  and  hinterland  trade,  forces  which 
were  already  well  developed  in  Germany.  In  order 
to  understand  this  growth,  it  is  necessary  to  go  far 
back  into  the  subject,  for  the  roots  of  the  financial 
present  lie  deep  in  the  historic  past. 

There  had  been  in  the  stage  of  town  economy  indi- 

Money-      viduals  and  families  of  great  wealth.     Some  of  them 

and"gerS    engag£d   in   changing   money — giving   one    coin   for 

banks        another — an  English  for  a  French  coin,  for  example. 

But  the  tendency  for  them  all  was  to  loan  money 

because  the  returns  were  large.     A  Jewish  money 

changer  would  readily  take  to  lending  money;    also 


METROPOLITAN  ECONOMY— ENGLAND        245 

an  Italian  merchant,  and  numerous  indeed  are  the 
distinguished  Florentine  mercantile  money  lenders. 
But  in  the  growing  towns,  those  that  promised  to 
become  metropolitan  cities,  or  actually  developed  into 
metropolitan  centers,  the  business  of  handling  money 
went  one  step  farther.  Banks  were  formed  to  receive 
people's  money  and  to  give  it  out,  either  to  pay  the 
debts  of  a  depositor,  or  to  loan  at  interest.  In  such 
flourishing  towns  and  incipient  metropolitan  centers 
as  Venice,  Genoa,  and  Amsterdam,  we  find  not  only 
money  changers  and  merchants  receiving  and  loaning 
money  but  specialized  private  bankers,  and  also  great 
public  banks.  But  we  are  most  interested  in  London 
because  it  is  in  that  city  that  we  can  trace  financial 
developments  to  the  fullest  extent. 

Sir  Thomas  Gresham,  with  whom  we   associate 
Gresham's  law,  is  an  example  of  an  early  London   Sir 
financier.     He  was  a  mercer,  shopkeeper,  merchant   Gresham, 
exporter  and  importer,  financial  agent  of  the  crown,   about 
and,  as  we  have  seen,  founder  of  the  Royal  Exchange  ' 
and  of  Gresham  College.     He  also  loaned  money, 
perhaps  even  received  some  from  friends  or  custom- 
ers to  loan.     His  place  of  business  was  at  the  Sign 
of  the  Grasshopper  in  Lombard  Street.71    A  hundred 
years  later,  not  merchants  but  goldsmiths,  constituted   1645  f. 
the  chief  money  dealers  in  London.     At  one  time 
there  were   forty-four  goldsmiths   carrying   running  1677 
cashes,72  or  deposit  and  loan  accounts.    They  received 
money  at  a  low  rate  and  loaned  it  at  a  high  rate. 
And  yet  we  do  not  find  that  these,  merchants  or  gold- 
smiths, were  specialized  bankers.     Banking  to  them 
was  but  one  of  their  functions — as  in  the  old  days  of 
town  economy. 

Messrs.    Child    and    Company,73  originally    gold-  \l^ur 
smiths,  seem  to  have  been  the  first  out-and-out  bank-  or  earlier 


246    INTRODUCTION  TO  ECONOMIC  HISTORY 


1673*. 

Private 
banks  in 
London 


Bill  of 
exchange 


Ancient 
period 
and  i3th 
century  f. 


iyth  and 
i8th  cen- 
turies 

London 
and  Paris 
as  bill 
markets 


ing  firm  in  London.  Child  and  Company,  as  well  as 
Messrs.  Hoare  and  Company,  exist  to-day.  Although 
private  banks  met  a  great  need,  they  did  not  have 
smooth  sailing,  if  we  may  judge  from  the  number 
that  failed  and  passed  out  of  existence.  The  busi- 
ness of  these  banks  was  to  receive  deposits,  make 
loans,  issue  bank  notes,  and  discount  bills  of  exchange. 

The  bill  of  exchange  is  closely  bound  up  with 
metropolitan  development.  It  is  simply  a  draft  or 
call  made  by  one  dealer  against  another  for  a  sum 
of  money  to  be  paid  within  a  short  time,  say  two  or 
three  months.  If  the  dealers  are  honest  and  well 
known,  the  bill  of  exchange  is  a  very  desirable  bit  of 
commercial  paper.  It  may  circulate  as  money  till 
the  date  due;  it  may  be  discounted  by  a  banker  (or 
bill  broker)  who  will  hold  it  until  due  and  then  de- 
mand payment;  or  it  may  be  made  the  object  of 
speculation. 

The  first  bills  of  exchange  were  foreign  bills  in  the 
stage  of  town  economy.  They  were  drawn  up  to 
settle  an  account  between  a  foreign  importer  and  a 
domestic  merchant  and  were  usually  payable  at  some 
fair.  But  as  town  economy  gave  way  to  metropolitan 
economy,  another  kind  of  bill  gained  prominence, 
the  inland  bill  of  exchange.  London  and  Paris  be- 
came important  markets  for  the  settlement  of  such 
bills  which  represent  sales  of  goods  made  not  in 
international  but  in  domestic  trade.  Of  course,  we 
are  not  to  conclude  that  the  foreign  bill  of  exchange 
ceased  to  be  used.  It  has  continued  to  the  present 
to  be  a  vital  factor  in  international  trade.  Two 
classes  of  dealers  handle  these  bills  in  London,  the 
"foreign  brokers"  and  the  "bill  brokers,"  the  former 
dealing  in  foreign  bills  of  exchange,  the  latter  in 
domestic.  These  two  typify  the  two  kinds  of  trade, 


METROPOLITAN  ECONOMY— ENGLAND        247 

the  extended  and  the  hinterland.  The  goods  that 
entered  or  left  the  metropolis,  whether  in  the  ex- 
tended or  the  hinterland  trade  when  not  paid  for  in 
cash,  were  usually  settled  by  means  of  bills  of 
exchange. 

The  bill  of  exchange  has  been  of  immense  help  to 
both  extended  and  hinterland  trade.     In  the  Middle   Service 
Ages  it  enabled  an  Italian  merchant  selling  fine  cloth  ^iii  of 
on  credit  to  a  draper,  say,  of  Bruges  to  realize  at  exchange 
once  on  his  sale.     He  drew  up  a  bill  stating  his  debt 
and  when  it  was  to  be  paid.     He  himself  signed  it, 
so  if  his  Bruges  debtor  did  not  pay,  he  would.    Then 
he  passed  it  off  as  money  or  discounted  it  with  a 
money  lender.     In  this  way  he  did  not  have  to  wait 
till  the  Bruges  dealer  had  sold  his  cloth  and  was  ready 
to  pay.     He  kept  on  buying  and  selling,  and  the  bills 
of  exchange  kept  on  falling  due  and  being  paid.    And  i8th 
so  later,  in  metropolitan  economy,  an  English  cattle  onwards 
dealer  could  sell  to  a  London  butcher  and  at  once 
discount  the  bill  he  would  draw  on  the  latter. 

At  the  same  time  that  the  metropolis  became  a 
market  for   domestic  bills,    it   developed   the   stock 
exchange.     At  first  this   exchange  was   for  sale   of 
goods  and  securities.     The  goods  might  be  spices, 
gold,   or  other  commodities.     The  securities  might  Stock 
be  certificates  of  government  debt,  bills  of  exchange,  *£~     es 
or  shares  of  companies'  stock.     Side  by  side  on  the 
exchange  there  were  merchants  and  brokers,  traders 
and  stockjobbers.     Speculation  in  securities  became 
so  obnoxious  to  the  merchants  of  the  Royal  Exchange 
in  London,  that  something  had  to  be  done.     After 
one  very  flagrant  run  of  speculation  the  stockjobbers   1698 
and  brokers  either  found  it  politic  to  withdraw,  or, 
according  to  another  view,  were   actually  expelled, 
from  the  Royal  Exchange  to  'Change  Alley.     Here 


248    INTRODUCTION  TO  ECONOMIC  HISTORY 

right  on   the   street  or  in   the   coffee   houses,   the 
speculation  in  securities  took  place,  while  the  sale  of 
goods  continued  in  the  Royal  Exchange.     After  a 
time  the  dealers  in  securities  left  the  street  and  coffee 
London,     houses  for  a  regular  building  of  their  own,  the  Stock 
1773          Exchange.     In  Paris  there  had  been  a  great  deal  of 
speculation  on  one  of  the  streets,  but  no  stock  ex- 
Paris,        change  for  securities  till  one  was  founded  by  the  king 
1724          of  France.74     In  New  York  there  had  been  specula- 

1791  tion  on  Wall  Street  before  there  was  a  stock  exchange. 

1792  The  brokers  then  agreed  not  to  buy  or  sell  at  less 
than  a  certain  rate  of  gain  to  themselves.  And  finally, 

Nevf         a  regular  stock  exchange  was  organized.75     Later, 
1817'         stock  exchanges  have  been  formed  in  other  English, 
French,  and  American  cities,  and  indeed  in  many  parts 
of  the  world.     They  are  found  in  centers  of  com- 
merce which   aspire   to  metropolitan   proportion   as 
well  as  in  the  metropolitan  cities  themselves.     Only 
in  the  latter  do  they  flourish  or  count  for  very  much. 
The  stock  exchange  meant  a  more  perfect  market 
Stock         organization  than  had  formerly  existed.     Securities 
and  ange    °f  almost  every  kind  could  be  sold  at  any  time — at 
credit        a  price.    These  securities  were  bits  of  paper  indicat- 
ing in  effect  the  indebtedness  of  some  person,  cor- 
poration,   or   state.     While   the    general   mercantile 
exchange    characteristic    of    the    first    phase,    was 
an    organization    for    selling   goods,    the    stock    ex- 
change   was    an    organization     for    selling    credit. 
When  we  reflect  that  much  of  our  modern  business 
depends  upon  credit — things  to  be  done  in  the  future 
rather  than  accomplishments   of   the   past,   we   are 
aware  of  the  importance  of  the  stock  exchange. 
Specula-         People   associated  manipulation   of  the  prices   of 

tion  in  ....  ,  .   ,  , 

London      securities  with  the  stock  exchange,  with  speculation 
of  all  kinds,  and  with  crises.     Preachers  and  pam- 


METROPOLITAN  ECONOMY— ENGLAND        249 

phleteers  denounced  brokers  and  stockjobbers  and 
their  evil  deeds.  Laws  were  passed  to  regulate  their  England, 
affairs.  And  there  can,  of  course,  be  no  question  l697 
about  the  guilt  of  many.  For  instance,  false  reports 
were  circulated  about  the  death  of  a  king  to  force 
down  the  value  of  the  securities  he  had  issued;  rumors 
were  spread  that  a  trading  company's  fleet  had  been 
wrecked,  in  order  to  lower  the  value  of  its  securities. 
Then  when  the  price  had  fallen,  some  one  would 
appear  and  buy  up  all  the  stocks  or  bonds  of  the 
person  or  firm  in  question.  Such  a  buyer  often  had 
contracted  to  sell  these  securities,  without  really 
possessing  any,  and  so  when  the  date  of  delivery 
arrived  it  was  to  his  interest  to  force  down  the  price 
of  the  securities  that  he  had  to  buy  in  order  to  fulfill 
his  contract.  Such  a  dealer  was  called  a  "bear,"  one 
who  had  sold  the  fur  of  the  bear  before  he  had  shot 
the  animal.  The  other  type  of  dealer  was  a  "bull," 
who  sought  not  to  depress  prices  but  to  inflate  them 
(perhaps  after  the  manner  of  the  frog  in  the  fable), 
for  he  had  bought  securities  looking  for  a  rise.  These 
stock  exchange  animals  came  early  on  the  scene  and,  About 
of  course,  are  still  with  us.  One  of  the  first  of  these  I7°° 
speculators  in  London  was  Thomas  Guy.  The  son  of  1643-1724 
a  lighterman,  a  bookseller  himself,  he  opened  an 
office  in  'Change  Alley.  Here  he  bought  seamen's 
tickets,  or  wages  paid  to  the  seamen  in  the  form  of 
government  script.  With  the  large  fortune  that  he 
accumulated  he  founded  and  endowed  Guy's  Hos- 
pital.76 

In  America  these  stock-exchange  operators  began 
their  period   of  great  activity  just   after   the   Civil   Specula- 
War,  especially  in  dealing  in  railroad  stocks.     The   Jew"1 
most    notorious    were    Daniel    Drew,    Jay    Gould,   York 
James  Fisk,  and  Cornelius  Vanderbilt. 


250    INTRODUCTION  TO  ECONOMIC  HISTORY 

The  public  has  been  most  aroused  over  stock- 
Crises  exchange  transactions  in  times  of  crisis,  and  especially 
in  times  of  panic.  Periodically  business  has  become 
inflated  and  then  collapsed.  The  whole  cycle — of 
prosperity,  inflation,  crisis  (with  or  without  a  panic), 
and  deflation — has  occupied  about  ten  years,  more 
or  less.  It  is  essentially  a  matter  of  credit,  banking 
on  future  events  which  seem  auspicious  until  some 
one  begins  to  fear  that  not  everything  hoped  for  will 
materialize.  Then  another  has  the  same  fears,  and 
so  on,  each  one  hastening  to  sell  his  doubtful  assets. 
One  of  the  causes  of  fear  is  the  uncertainty  of  busi- 
ness, which  is  so  complicated  in  the  metropolitan 
period  that  no  one  can  be  sure  of  the  future.  Hinter- 
land trade  is  spread  out  over  a  wider  area  than  local 
trade  in  town  economy,  and  extended  trade  is  farther 
flung  than  ever  before.  Dealers  engaging  in  the  trade 
of  the  commonest  commodities  often  cannot  feel  cer- 
1558  f.  tain  about  the  affairs  of  others.  It  is  no  accident 
that  crises  begin  in  the  metropolis,  either  in  the  incip- 
1720  f.  ient  or  in  the  well-developed  metropolis.  And  it  is 
no  accident  that  has  led  America  to  devise  machinery 
to  stop  their  worst  excesses  (panics)  by  means  of 
1914  f.  improved  banking  machinery  with  headquarters  in 

the  metropolitan  centers. 

Bank  of         Among    the    securities    that    entered    into    stock- 
England     exchange  activities  in  London  almost  from  the  first 
was  the  stock   of  the  Bank  of  England.     Long  in 
1651  f.       demand,   the  Bank  was   founded  only  in    1694.     A 
group   of  Londoners   provided   the   government   of 
England  with  a  loan,  and  in  return  received  a  royal 
charter  of  incorporation  and  the  promise  of  a  large 
yearly  interest  on  the  loan.    The  government's  prom- 
ise was  the  basis  of  the  bank's  operations.     People 
took  its  notes  and  deposited  their  cash  with  it  on  the 


METROPOLITAN  ECONOMY— ENGLAND        251 

strength  of  this  promise.  If  it  had  not  been  for  the 
fact  that  it  carried  on  all  or  almost  all  of  the  banking 
business  of  the  government  of  England,  we  should 
be  inclined  to  say  that  it  ought  to  have  been  called 
the  "Bank  of  London" — like  the  Bank  of  Amster- 
dam and  the  Bank  of  Hamburg.  It  is  true  that  it 
discounted  domestic  as  well  as  foreign  bills  of  ex- 
change, but  the  former  were  apparently  for  a  long 
time  of  relatively  little  account  and  the  rates  high. 
It  was  a  bank  for  Londoners  to  go  to  for  help  in 
the  trade  within  the  metropolis  and  in  extended  (or 
foreign)  commerce.  Until  the  iQth  century  it  was 
not  a  great  factor,  at  least  not  directly,  in  the  local 
or  intra-metropolitan  trade  of  London. 

In  what  has  been  said  so  far,  there  has  been  little 
about  the  concentration  of  the  hinterland's  capital   Financial 
in  the  metropolis.     And  yet  at  least  from  the  time  concen- 

e      i  i       .    .  ,      J  .  ,        tration  in 

or  the  early  joint-stock  companies,   country  gentle-  the  me- 
men,    nobles,    and  clergy,    had   invested   in   London  tr°Polis 
commercial    securities.     And    when    the    goldsmiths  Late  1 6th 
received  deposits,  it  was  a  matter  of  complaint  that  centufy 
the  hinterland  was  drained  of  ready  money.77.     It  is   1668 
easy   to   understand   the   readiness   with   which   the 
people  of  the  hinterland  took  their  surplus  cash  to 
the  goldsmiths,    and,   we  may   add,    to   the   private 
bankers  of  London.     For  the  first  time  they  had  an 
opporunity  of  receiving  interest  on  their  money  and 
also  of  getting  it  back  practically  when  they  wanted 
it.      In   other  words,   private  bankers   were   money 
middlemen  who  stood  in  between  the  owners  of  the 
capital  and   the  users  of  it.     They  concentrated  it 
in  London  and  loaned  it  to  those  who  could  use  it. 
They  seem  to  have  paid  about  6  per  cent  and  to  have 
received  about  20  per  cent  for  it,  the  difference  being 
their  profits. 


252    INTRODUCTION  TO  ECONOMIC  HISTORY 


Late  1 8th 
century 

Branch 
banks 
link  the 
hinter- 
land with 
the  me- 
tropolis 


Bank  of 
England 
and  the 
hinter- 
land 

1774  f- 


1791-1811 
1816-36 


1834-72 


Some  of  the  private  banks  of  London  established 
branches  in  the  towns  of  the  hinterland.  Sometimes 
these  branches  were  opened  by  a  junior  partner  or 
even  a  clerk,  it  might  be  with  not  a  guinea  as  capital 
or  even  not  a  farthing.  The  capital  was  nearly  all 
to  be  raised  by  issuing  notes  which  local  gentlemen 
and  merchants  were  induced — sometimes  by  a  con- 
sideration— to  keep  in  circulation.  Then  the  branch 
would  do  a  banking  business  with  these  notes  as  the 
basis,  but  in  case  local  capital  was  plentiful  and  cheap 
the  branch  tried  to  concentrate  funds  in  the  parent 
bank  in  London.78  More  worthy  London  banks 
actually  sent  out  capital  on  which  to  do  business,  but 
they  too  were  commonly  interested  in  getting  deposits 
which  they  could  use  at  headquarters.  The  establish- 
ment of  these  branches  is  indicative  of  the  need  for 
financial  organization  in  the  hinterland. 

That  the  Bank  of  England  did  not  rise  to  the 
occasion  and  establish  branches  in  the  chief  towns  of 
the  hinterland  is  a  fact  which  is  hard  to  explain.  It 
had  been  advised  to  do  so,  soon  after  its  foundation.79 
Scotch  banks,  after  some  failures,  had  set  up  success- 
ful branches.  The  First  United  States  Bank  had 
established  eight  branches  in  the  chief  cities  on  the 
Atlantic,  the  headquarters  being  at  Philadelphia. 
And  the  Second  United  States  Bank  had  opened 
branches  in  twenty-five  towns,80  which  were  generally 
speaking  successful,  the  exceptions  being  those  in  the 
interior  that  drained  the  resources  of  the  bank  with- 
out offering  much  safe  and  profitable  banking  busi- 
ness.81 But  in  1826  the  Bank  of  England  did  finally 
open  branches.  Two  of  the  three  opened  were  later 
closed,  and  at  least  five  were  closed  within  thirty- 
eight  years,  but  ten  are  doing  business  to-day,  in  the 
manufacturing  and  commercial  towns  of  England.82 


METROPOLITAN  ECONOMY— ENGLAND        253 


The  Bank  of  England  holds  the  deposits  of  private 
customers  and  the  reserves  of  the  banks  of  England 
generally.83  Indeed,  it  is  the  greatest  single  instru- 
ment for  concentrating  capital  in  London.  In  other 
words,  it  is  no  longer  simply  a  bank  for  London  and 
London's  extended  trade  but  for  the  hinterland  as 
well. 

Similarly  on  the  Continent,  the  national  banks  have 
established  branches.  The  government  of  France 
compelled  the  Bank  of  France  to  establish  branches 
in  every  departmental  town  in  the  state.  Outside 
of  Paris,  it  has  582  branches  and  auxiliaries.  The 
Imperial  Bank  of  Germany  has  488  offices.  By  means 
of  this  branch  system  there  is  a  tremendous  concen- 
tration of  capital  and  credit  in  France  and  Germany. 

Except  for  the  Bank  of  England,  there  were  no 
joint-stock  banks  in  England  until  an  old  law  making 
them  illegal  had  been  repealed.  Three  were  soon 
established  in  towns  of  the  hinterland.  The  London 
and  Westminster  Bank  was  the  first  (1834)  to  be 
opened  in  London,  and  it  is  one  of  strongest  there 
to-day.  The  rapid  formation  of  these  banks  in  a 
short  period,  1 18  within  fifteen  years,  shows  the  deep- 
seated  need  for  them.  But  recently  they  are  amal- 
gamating so  that  not  long  ago  there  were  in  England 
and  Wales  but  forty-four  left,  and  to-day  the  number 
is  less  than  thirty.  As  they  have  become  fewer,  they 
have  grown  in  resources,  and  what  interests  us  even 
more,  in  the  number  of  branches  they  operate.  Re- 
cently a  writer  announced  that  one  bank  had  even 
more  than  600  branches,  but  to-day  at  least  three  Lon- 
don banks  have  more  than  twice  that  many,  Lloyds 
more  than  1600  in  England  and  Wales,  the  London 
Joint  City  and  Midland  1550,  and  Barclays  1500. 
Others  state  that  they  have  branches  and  offices  in 


Branch 
banks 
on  the 
Continent 

1857 
1913 
1913 


1709 
1826 

English 
joint- 
stock 
branch 
banks 

1827-42 
1913 


1920 

1909 
1922 


254    INTRODUCTION  TO  ECONOMIC  HISTORY 


1919 


Hinter- 

with 

"olUan 
connec- 


175° 
1826 


Late  i8th 


turies 


every  important  town  in  England.  In  all,  England 
and  Wales  now  have  nearly  8000  banking  offices,  in- 
cluding headquarters  and  branches.  Five  joint-stock 
banks,  all  with  their  central  offices  in  London,  own 
well  over  6000  of  these.  Great  is  the  financial  con- 
centration in  London.84 

But  it  has  not  been  simply  a  matter  of  banks  located 
in  the  metropolis  going  out  to  establish  branches  in 
the  hinterland:  the  banks  of  the  hinterland  have 
themselves  turned  to  establish  connections  in  the 
metropolis  thereby  furthering  the  concentration  of 
resources.  Although  the  first  bank  —  private  of 
course  —  to  be  established  in  the  tributary  area  of 
London  was  set  up  probably  in  17  1685  and  the  second 
in  1737,  it  is  said  that  there  were  soon  about  a  dozen, 
and  at  one  time  not  far  from  five  hundred.  The 
country  bankers,  many  originally  merchants,  im- 
mensely facilitated  the  trade  of  the  hinterland  by 
establishing  connections  in  the  metropolis.  The  usual 
practice  was  for  a  hinterland  bank  to  choose  some 
banker  (at  first  private  bankers  and  bill  brokers, 
later  joint-stock  banks  also)  to  do  their  business  on 
condition  that  they  keep  with  their  agent  a  certain 
minimum  balance.  The  aggregate  sum  of  these  bal- 
ances must  have  been  a  large  factor  in  financial 
concentration.  Some  of  these  hinterland  banks  pro- 
ceeded  to  issue  bank  money  based  on  the  balances  kept 
m  London.86  And  there  are  amusing  stories  of  sud- 
den  and  secret  visits  of  country  bankers  to  London 
to  get  gold  and  silver  to  meet  runs  on  their  bank  at 
home.  Thieves  found  holding  up  such  bankers  par- 
ticularly profitable,  and  London  found  the  loss  of  the 
hard  cash  very  trying  in  times  of  a  general  crisis. 
London  kept  the  cash  reserves  of  its  area  and  when 
one  of  the  banks  in  the  metropolis  holding  these 


METROPOLITAN  ECONOMY— ENGLAND        255 

reserves  failed,  the  notes  of  the  country  bankers  were 
discredited. 

It  is  the  function  of  this  banking  system,  not  the 
structure  of  it,  that  is  really  important.     By  means  Metrop- 
of  the  balances  held,  the  banks  in  the  metropolis  could  •>ij1zse™ob" 
discount  bills  of  exchange  coming  in  from  different  thecapi- 
parts.     The  bills  are  always  coming  in  and  always  {,!nter-he 
being  paid.    Bills  leaving  London  for  the  hinterland  land 
in  the  long  run  balance  those  entering  it.     But  this 
is  only  part  of  the  story.    When  a  banker  wanted  to 
send  money  to  another  banker  in  the  hinterland,  he 
did  so  through  his  London  agent.     To-day  he  prob- 
ably does  so   through  a  big  joint-stock  bank  with 
branches  in  both  towns,  but  with  headquarters  in  the 
metropolis.    We  can  say  then  that  the  London  banks 
mobilized  the  capital  and  credit  of  the  whole  area. 
When  agricultural  towns  had  a  surplus,  the  London 
banks  transferred  it  to  the  manufacturing  towns,  and 
then  back  again  when  needed.     It  is,  of  course,  ap- 
parent that  great  economy  is  brought  about  by  the 
continuous  and  effective  use  of  capital  in  this  manner. 
A  little  goes  a  long  way  when  it  can  be  mustered 
where  needed.     The  storage  of  fluid  capital  is  much 
the   same   as   the   storage   of  merchandise.     It  can 
best  be  done  in  the  metropolitan  centers  and  from 
there  be  taken  out  for  use  where  and  when  desired. 

A  similar  development  took  place  in  the  United  Late  i8th 
States.     Balances  were  kept  in  the  banks  located  in  centuryf- 
the  larger  towns  or  cities.87    At  first  this  was  merely  Conccn- 
a  matter  of  convenience  on  the  part  of  the  "country"  JJ3*^11 
banks.     The  balances  were  used  especially  to  meet  serves  in 
demands  made  by  the  banks  in  the  smaller  towns  on  Amenca 
the  banks  in  the  large  centers.    Later,  all  urban  com- 
munities were  divided  by  federal  statute  into  three 
classes,  one  central  reserve  city,  a  few  reserve  cities, 


256    INTRODUCTION  TO  ECONOMIC  HISTORY 

and  a  residue  of  non-reserve  places.  A  certain  per 
cent  (60)  of  the  reserves  in  the  banks  of  non-reserve 
towns  might  be  kept  in  banks  located  in  reserve  cities, 
sixteen  to  eighteen  in  number.  And  one-half  of  the 
reserves  of  banks  in  the  sixteen  cities  might  be  kept 
in  the  central  reserve  city  of  New  York.  The  reserves 
of  banks  in  New  York  were  to  be  kept  in  their  own 
vaults.88  In  this  way  the  reserves  of  American  banks 
were  pyramided  in  New  York,  so  that  it  became  a 
center  for  financial  concentration  comparable  to 
London. 

1887  The  number  of  central  reserve  cities  was  increased 

to  three,  Chicago  and  St.  Louis  being  included  with 

1914  New  York  City.89  The  Federal  Reserve  system  pro- 
vided twelve  cities  instead  of  three,  in  which  reserves 
against  deposits  were  to  be  kept.  The  whole  of  the 

Federal     United  States  was  divided  into  twelve  districts,  each 

Reserve        ^      Federal  Reserve  Bank.     Because  of  the  fact 

system  .. 

that  some  parts  of  the  country  had  not  yet  really 
reached  the  metropolitan  stage,  selection  of  a  few 
centers  that  were  not  metropolitan  had  to  be  made. 
In  fact,  these  few  were  relatively  insignificant  places, 
notably  Dallas  and  Richmond.  Each  of  the  Federal 
Reserve  Banks  is  a  banker's  bank,  the  capital  being 
subscribed  by  the  banks  and  the  business  being  done 
for  the  banks  (and  the  government).  A  certain 
amount  of  concentration  was  involved  in  the  mere 
subscription  to  the  capital  of  the  Federal  Reserve 
Bank,  but  the  important  aspect  of  the  system  is  the 
rediscounting  of  commercial  paper  by  the  Federal  Re- 
serve Bank.  The  banks  in  the  hinterland  (or  in  the 
metropolis  itself)  discounting  a  note,  a  bill,  or  a  draft, 
for  a  merchant,  for  a  manufacturer,  or  at  times  for  a 
farmer,  can  rediscount  this  at  the  Federal  Reserve 
Bank  of  the  district.  There  is  practically  no  limit 


METROPOLITAN  ECONOMY— ENGLAND        257 

to  the  amount  that  can  be  discounted,  for  Federal 
Reserve  notes  can  be  issued  in  vast  quantities,  pro- 
vided that  reserves  of  forty  per  cent  gold  are  main- 
tained against  the  notes  issued.  More  important 
than  rediscounting  and  obtaining  Federal  Reserve 
notes  is  the  practise  of  borrowing  from  the  Federal 
Reserve  Bank  itself  (by  means  of  rediscounted  paper 
and  collateral  loans) ,  a  practise  which  enables  various 
parts  of  the  district  to  draw  heavily  upon  metropol- 
itan resources  in  time  of  need.  Branches  of  the  Fed- 
eral Reserve  Banks  have  been  established  in  a  few 
of  the  more  important  towns  of  the  district,  some- 
what remote  from  the  metropolitan  center. 

Besides  the  banks  which  act  as  agents  of  financial 
concentration  in  the  metropolis,  there  are  many  trad-  Business 

,      r.    .  •          i         i  balances 

ing,  transportation,  and  mining  companies  that  keep   inthe 
in  the  metropolitan  centers  both  their  current  receipts  metrop- 
and  their  cash  reserves.     Of  course,  these  are  not 
necessarily  held  in   the  companies'    own   vaults   but 
deposited  generally  in  the  banks  of  the  metropolis. 
Insurance  companies  perform  a  similar  concentrating 
function.     The   latter    are    so    important    that   they 
should  be  at  least  briefly  set  forth. 

There   are   two  chapters   in  the  early  history   of  London 
insurance  in  England  that  are  of  great  interest.    One   Duranc 
is  the  establishment  of  the  business  in  the  metropolis   business 
and  the  other  its  extension  from  the  metropolis  to 
the  hinterland.     Although   fire   insurance   had  been   1635, 
early  advocated,  it  made  no  headway  in  England  till   1610' 
after  the  great  fire  in  London.    The  first  fire  insurance   l666 
office  in  London  was  owned  by  Nicholas  Barbon,  a   l66? 
physician  and  pamphleteer.     The  first  joint-stock  in- 
surance company  was    formed   not   long   after,   and   1681 
following  it  the  earliest  company  now  in  existence.    1696 
Then  came  the  Sun  Fire  Office,  which  was  to  serve 


258    INTRODUCTION  TO  ECONOMIC  HISTORY 


London 
marine 
insurance 
business 

1 7th 
century 

1720-1824 


London 
life 

insurance 
business 


1706  f. 
1762  f. 


1756  f. 


1842 
1859 


not  only  London  but  the  whole  realm.  By  1721 
several  London  companies  were  doing  business — 
companies  still  existing — both  in  the  metropolis  and 
the  hinterland. 

Although  marine  is  older  than  fire  insurance,  its 
organization  in  the  form  of  large  companies  is  some- 
what later.  At  first  individuals,  or  groups  of  indi- 
viduals, meeting  to  do  business  at  the  coffee  houses, 
notably  Lloyd's,  had  insured  ships  and  cargoes.  Later 
two  companies,  the  London  and  the  Royal,  were  given 
a  monopoly  as  against  all  other  English  insurance 
companies.  These  companies  soon  sought  business 
wherever  it  was  to  be  found. 

Life  insurance,  like  marine,  is  older  than  fire  in- 
surance but  it  developed  a  company  organization 
somewhat  later  than  either.  Life  insurance  in  Lon- 
don was  written  by  individuals  at  least  as  early  as 
1583.  Companies  came  later,  only  the  Amicable 
being  of  any  importance  till  the  foundation  of  the  first 
modern  company,  the  Equitable  of  London.  Soon 
after  the  formation  of  the  Amicable,  life  insurance 
began  to  spread  to  the  provinces,  in  so  far  as  the 
London  companies  did  business  there  and  separate 
companies  were  set  up  in  the  country.  In  America 
there  had  been  many  special  projects,  notably  for 
insuring  the  clergy,  but  modern  life  insurance  dates 
from  1809  when  the  first  commercial  company  was  es- 
tablished in  Philadelphia.  Then  in  the  other  growing 
metropolitan  centers  similar  companies  were  set  up,  as 
well  as  in  such  tributary  towns  as  Hartford  (a  pioneer 
in  the  insurance  business),  Worcester,  Springfield, 
Trenton,  and  Milwaukee.  The  greatest  of  the  Amer- 
ican companies,  the  Mutual  of  New  York,  was  founded 
relatively  late,  and  the  Equitable  of  New  York  also 
doing  an  enormous  business,  somewhat  later  still.90 


METROPOLITAN  ECONOMY— ENGLAND        259 


Such  companies,  the  greatest  of  them  located  in 
metropolitan  centers,  were  agents  of  concentration 
to  a  marked  degree.  Millions  of  people  pay  pre- 
miums into  their  coffers  and  millions  put  their  savings 
into  some  kind  of  endowment  or  annuity  policy.  The 
combined  resources  of  such  agencies  constitute  a  con- 
siderable factor  in  metropolitan  finance.  A  somewhat 
similar  account  might  be  given  of  the  history  of  sav- 
ings banks  in  England  and  America  and  of  trust 
companies  in  America,  but  the  main  point  of  the  con- 
centration of  fluid  capital  is  clear.  We  cannot  dis- 
cover even  approximately  how  much  this  was,  but  it 
was  enough  for  the  needs  of  both  metropolis  and 
hinterland. 

The  counterpart  of  concentration  in  the  metrop- 
olis is  radiation  from  it.  The  same  money  mechan- 
ism that  concentrates  capital  helps  disperse  it  either 
in  the  metropolis  or  in  the  hinterland.  While  one 
local  bank,  or  one  branch  banking  system,  located  in 
a  section  of  the  hinterland  which  has  a  surplus  of 
capital  for  investment  and  accordingly  where  interest 
rates  are  relatively  low,  will  function  chiefly  in  piling 
up  banking  capital  in  the  metropolis,  another  located 
where  capital  is  relatively  scarce  and  interest  rates 
high,  will  work  in  the  opposite  direction.  In  Amer- 
ica to-day  the  capital  in  the  metropolis  is  used  to 
finance  the  business  of  the  hinterland  and  also  to 
promote  new  companies  and  to  refinance  old  ones. 
Money  is  issued  freely  to  meet  the  needs  of  both 
metropolis  and  hinterland. 

In  America,  where  branch  banking  is  not  wide- 
spread91 and  where  generally  the  individual  bank  is  at 
least  theoretically  a  local  enterprise,  financial  radia- 
tion and  concentration  are  sometimes  effected  through 
a  system  of  chain  (line)  banks.  The  chain  banks 


General 
effect  of 
insurance 
business 
on  the 
metrop- 
olis 


1 8th  and 
1 9th  cen- 
turies 


Financial 
radiation 
from  the 
metrop- 
olis 


Chain 
banks  in 
America 


260    INTRODUCTION  TO  ECONOMIC  HISTORY 


Combina- 
tion of 
money 
middle- 


Pujo 
Com- 
mittee 
Report, 
1912-13 


1913 

Wall 
Street 


located  here  and  there,  it  may  be  four  or  twenty  in 
number,  are  owned  by  one  banker  (or  a  group  of 
bankers)  or  by  a  holding  company  in  the  metropolis, 
in  case  the  head  office  is  located  there.  If  the  banks 
are  old  local  institutions  bought  up  by  the  chain,  all 
the  stock  may  be  centrally  held;  but  if  newly  estab- 
lished, local  people  are  ordinarily  brought  in  to  sub- 
scribe a  minority  of  the  stock  of  each  bank.  The 
function  of  the  chain  is  to  radiate  capital  from  the 
metropolis  to  the  hinterland,  to  concentrate  it  in  the 
metropolis,  or  to  shift  it  from  one  part  of  the  hinter- 
land to  another  where  it  is  more  needed.  Thus  the 
chain  of  banks  performs  essentially  the  same  func- 
tions as  a  branch  bank. 

Although  for  the  purpose  of  description  we  may 
deal  separately  with  banks,  bill  brokers,  stock  ex- 
changes, and  insurance  companies,  we  cannot  really 
separate  the  working  of  the  institutions  themselves. 
They  are  inextricably  bound  together  to  form  one 
metropolitan  system.  The  interdependence  of  these 
financial  agencies  suggests  the  unwelcome  thought 
that,  if  an  unscrupulous  man  (or  group  of  men)  cap- 
tured the  system,  he  could  hold  metropolitan  eco- 
nomic life  in  his  hands.  Within  the  metropolis,  indeed, 
there  has  grown  up  a  combination  of  money  middle- 
men who  have  a  large  measure  of  control  over  private 
finance.  We  hear  about  this  chiefly  when  there  is 
complaint  of  excesses  committed,  but  it  exists  gener- 
ally in  metropolitan  centers,  large  and  small,  old  and 
young,  differing  only  in  degree.  In  New  York  City 
a  group  of  financiers,  with  J.  P.  Morgan  and  Com- 
pany at  the  head,  effectively  controlled  about  twenty- 
three  billions  of  dollars.  In  the  combination  of  money 
power,  often  called  "Wall  Street,"  there  were  grouped 
private  bankers  such  as  J.  P.  Morgan  and  Company, 


METROPOLITAN  ECONOMY— ENGLAND        261 

and  Kuhn,  Loeb,  and  Company;  joint-stock  banks 
such  as  the  National  City  Bank,  the  National  Bank 
of  Commerce,  and  the  First  National  Bank;  trust 
companies  like  the  Guaranty  Trust  Company  and 
the  Bankers  Trust  Company;  the  Mutual  Life  and 
the  Equitable  Life  insurance  companies;  railroads 
like  the  New  York  Central,  the  Pennsylvania,  and 
the  New  Haven;  the  International  Mercantile  Ma- 
rine Company;  manufacturing  concerns  such  as  the 
United  States  Steel  Corporation,  General  Electric 
Company,  the  Pullman  Company,  and  the  Interna- 
tional Harvester  Company;  the  American  Telephone 
and  Telegraph  Company  and  the  Western  Union; 
and  great  electric  transit  companies.  Such  a  group 
was  probably  never  formed  before.  When  an  indi- 
vidual or  a  firm  was  a  member  of  the  group,  all  was 
well,  but  when  on  the  outside  he  found  it  difficult  to 
raise  a  large  loan.  If  he  competed  with  some  com- 
pany on  the  inside,  he  had  no  chance  at  all,  so  it  is 
believed,  of  getting  financial  consideration.  In  other 
words,  the  system  of  concentration  and  radiation  did 
not  work  for  his  benefit.  This  may  be  regarded  as 
one  of  the  abuses,  not  of  the  uses,  of  the  system. 

In  this  phase  of  metropolitan  economy  there  are 
two   interests   and  two   corresponding  policies,   not  Policy  of 
unlike  those  found  before.     On  the  one  hand,  there   m??I?r 

•  r  •  middle- 

is  a  powerful  group  of  money  middlemen  or  financiers  men: 

who  believe  in  laissez-faire.  This  means  to  them  'ai.ssez~ 
chiefly  freedom  to  organize  financial  combines  as  they 
will,  most  of  them  perhaps  for  the  general  good  but 
a  few  unjustifiable.  It  means  that  they  are  to  be 
free  to  promote  new  businesses  at  will,  to  exact  such 
terms  as  they  wish  from  firms  seeking  loans,  and  to 
consolidate  into  large  combines  all  transportation  and 
manufacturing  companies  that  in  their  opinion  should 


262    INTRODUCTION  TO  ECONOMIC  HISTORY 

combine.  They  are  thinking  of  the  economy  of  man- 
agement and  dividends  rather  than  service  to  the 
public,  although,  of  course,  the  two  considerations 
are  not  entirely  separable. 

But  there  is  another  interest  and  another  policy. 
Policy       It  is  regulation  of  these  money  powers.     Those  sup- 
strictine     porting  such   regulation  constitute   a   motley   crowd 
money       from  the  manufacturer  who  cannot  get  a  loan  on  Wall 
mendle~      Street  to  the   farmer  who   thinks   that   the   money 
middlemen    are    discriminating    against    agriculture; 
from  the  poor  man  who  rides  on  a  railroad,  the  serv- 
ice of  which  has  been  impaired  through  manipulation 
by  the  metropolitan  capitalists,  to  the  democrat  who 
fears  in  a  vague  way  the  power  of  money,  remember- 
ing perhaps  the  Biblical  teaching  about  Mammon  and 
the  classical  lore  about  Pluto.    And  there  is  the  state 
socialist  who   says:    let  the  money  middlemen   go 
ahead  and  consolidate;   soon  we  socialists  shall  step 
in,  not  so  much  to  regulate  as  to  own  and  use  the 
resources  so  conveniently  brought  together  for  public 
control.    In  other  words,  the  metropolitan  system  of 
concentration  and  radiation  as  managed  by  the  money 
group  is  regarded  by  such  extreme  reconstructionists 
as  a  preparation  for  a  new  social  order. 

In  contemplating  the  intra-metropolitan  financial 
Inter-        organization  with  its  concentration  and  radiation  and 

met.r°-       its  combination  of  money  middlemen,  we  too  readily 
pohtan        .  .  ..    J      r          •  t        i   ,•  /-TM 

finance      forget   inter-metropolitan    financial    relations.      1  he 

great  financial  houses  of  one  metropolis  are  closely 
related  to  those  of  another  metropolis,  the  relation 
usually  being  one  of  mutual  interest  and  co-operation. 
J.  P.  Morgan  and  Company  of  New  York  work  with 
Lee,  Higginson,  and  Company  of  Boston;  and  Kuhn, 
Loeb,  and  Company  of  New  York  with  Kidder,  Pea- 
body,  and  Company  of  Boston.  In  underwriting 


METROPOLITAN  ECONOMY— ENGLAND        263 

securities  these  concerns  generally  look  after  the  share 
of  the  business  allotted  to  their  own  metropolitan 
area.     Sometimes  one  concern  has  offices  in  two  or 
more  metropolitan  centers.    J.  P.  Morgan  and  Com- 
pany has  offices  in  New  York,  Philadelphia,  and  Paris. 
Nearly  a  century  ago  the  firm  of  Brown  Brothers  and   1825 
Company  of  New  York  was  established  as  an  offshoot 
of  Alexander  Brown  and  Sons  of  London.    And  for  a 
long  time  August  Belmont  and  Company  has  been  the   Since 
representative  of  the  Rothschilds  who  have  offices  in   1  37 
several    European    metropolitan    centers.92     Accord- 
ingly, it  is  not  simply  the  metropolis  and  its  hinter- 
land that  are  held  together  by  these  financial  combi- 
nations, but  one  metropolitan  system  is  kept  in  close 
relationship  with  another,  whether  in  the  same  coun- 
try or  in  different  lands.    J.  P.  Morgan  and  Company 
and  business   associates  bind  the   interests   of   New 
York,    Boston,    Philadelphia,    Chicago,    Paris,    and 
London.     And  during  the  late  war  this  firm  was  a 
tower  of  strength  for  the  Allied  and  Associated  States 
fighting  against  the  Central  Powers.     The  electric 
telegraph  and  cable  have  bound  together  the  metro-  London 
politan  centers  of  the  world  so  closely  that  the  slight-  York 
est  move  on  the  stock  market  of  one  is  likely  to  affect   since 
the  other.     "How's  London?"  has  long  been  a  cry   lg^|'' 
in  New  York. 

Between  the  full-fledged  metropolitan  centers  of 
the  world,  such  as  those  mentioned  above,  there  is   Trade 
a  lively  trade  not  only  in  general  merchandise,  gold,   ferences 
and  silver,  but  also  in  securities.     Money  and  credit   between 
are  being  constantly  transferred  from  one  to  another.   poihan 
It  is  true  that  they  are  not  all  equal  in  resources,   centers 
That  is  not  the  point:    they  are  all  equal  in  function. 
Each  has  reached  the  financial  phase  of  metropolitan 
development.     The  inter-metropolitan  financial  deal- 


264    INTRODUCTION  TO  ECONOMIC  HISTORY 

ings  are  between  equals  in  service  though  not  in  age 
or  wealth. 

But  there  is  another  inter-metropolitan  relationship 
London      of  great  significance.     One  metropolis  may  be  in  the 
Chester-0"  financial  phase  of  its  development  while  another  has 
Liverpool  not  gone  so  far.     If  they  are  near,  the  better-devel- 
oped center  performs  some,  it  may  be  many,  financial 
functions  for  the  other.     We  may  well  consider  the 
relation  between  London  and  Manchester-Liverpool. 
For  a  long  time  the  latter  were  but  tributary  towns 
of  the  former.     But  gradually  within  the  period  of 
i9th          about  a  hundred  years  Manchester-Liverpool  attained 
century      a  jarge  measure  of  commercial  independence,  with 
their   own  hinterland  in   the   northwestern   part   of 
England  and  Wales,   and  with  their  own  extended 
trade  notably  with  America  and  the  Orient.     Their 
textile  industries  and  metallic  manufactures,  and  their 
transportation  systems,  at  first  subordinate  to  Lon- 
don's,  gradually  became  largely  independent.      But 
during  this  period  we   find  that  Manchester-Liver- 
pool in  spite  of  their  efforts  remained  financially  de- 
pendent on  London.     When  London  had  sixty-seven 
1810          banks,  Liverpool  had  only  five  and  Manchester  only 
two.93     Then  the  Bank  of  England  opened  branches 
1826, 1827  first  in  Manchester  and  later  in  Liverpool.     Liver- 
pool has  had  great  success  in  developing  an  insur- 
ance business  independent  of  London,  but  it  has  been 
dependent  on  London  and  Manchester  for  much  of 
its  banking.9*     And  yet  one  of  its  banks,  the  Bank 
of  Liverpool  and  Martins,  has  321  branches  and  sub- 
branches  in  Liverpool  and  the  district  round  about. 
Manchester  has  shown  signs  of  considerable  financial 
strength.      One   of  its   banks,   the   Manchester   and 
Liverpool    District     Banking    Company,     has     340 
branches   and   sub-branches   in   the   northwest.      Six 


METROPOLITAN  ECONOMY— ENGLAND        265 


banks  with  headquarters  in  cither  Manchester  or 
Liverpool  have  an  aggregate  of  nearly  1 100  branches 
and  sub-branches.  One  of  the  six,  with  its  140 
branches,  has  recently  been  affiliated  with  a  London 
bank.  Whether  this  is  indicative  of  an  even  greater 
dependence  on  London,  remains  to  be  seen. 

But  this  is  not  all,  for  a  movement  is  under  way 
leading  to  the  affiliation  of  the  London  with  the 
Scotch  and  Irish  banks.  One  London  bank,  the  Lon- 
don Joint  City  and  Midland  Bank,  together  with  its 
two  affiliated  banks,  has  branches  throughout  the 
British  Islands.  It  looks  as  though  in  time,  if  this 
movement  continues,  there  will  be  a  branch  banking 
system  in  the  United  Kingdom  comparable  in  struc- 
ture to  that  long  existing  in  Scotland  and  well  devel- 
oped in  Canada.  Of  course,  it  is  to  be  understood  that 
the  banking  capital,  while  largely  managed  in  Lon- 
don, is  kept  and  used  in  those  centers  where  needed. 
The  recognized  banking  centers  of  the  British  Isles 
are  not  only  London  and  Manchester-Liverpool  but 
also  Edinburgh  and  Dublin.  The  Irish  capital  derives 
much,  the  Scotch  capital  virtually  all,  of  its  financial 
importance  from  its  political  position. 

English  banks,  perhaps  we  should  now  say  "British 
banks,"  are  merging  not  only  with  institutions  in  the 
British  Isles  but  with  those  abroad,  in  the  colonies 
and  in  foreign  lands.  This  is,  of  course,  primarily 
to  facilitate  trade  already  existing,  but  it  goes  even 
farther.  The  English  have  learned  that  by  the  exten- 
sion of  credit  they  can  call  forth  from  the  tomb  of 
decadent  and  retarded  civilizations  great  productive 
powers  that  will  result  in  large  orders  for  their 
manufacturers  and  merchants.  In  short,  England 
with  is  branch  bank  system  focusing  on  the  metro- 
politan centers  of  London  and  (to  a  less  extent) 


1920 


Joint 
stock 
branch 
banks 
of   the 
United 
Kingdom 
center- 
ing  in 
London 


English 
banks  and 
extended 
trade 


266    INTRODUCTION  TO  ECONOMIC  HISTORY 

Liverpool-Manchester,  like  the  United  States  with  its 
Federal  Reserve,  is  well  organized  both  for  looking 
after  hinterland  business  and  for  furthering  its  ex- 
tended commerce  all  over  the  world. 

The   developing  metropolis   is   usually   under   the 

Slow          financial  tutelage  of  some  fully  developed  metropolis. 

develop-     Gradually  a  large  measure  of  financial  independence 

ment  of  111  j      t  i  j  i 

financial  is  secured  and  then  the  new  and  the  old  are  equal, 
md e~  not  in  resources  but  at  least  in  function.  In  America, 
Chicago  and  St.  Louis  have  struggled  to  become 
independent  of  eastern  financial  cities,  especially  New 
York.  And  more  recently  the  Twin  Cities  of  the 
American  Northwest  have  in  a  sense  tried  to  free 
themselves  from  New  York  and  Chicago.  As  the 
new  metropolitan  centers  of  the  West  developed, 
their  financial  demands  upon  eastern  cities  put  the 
latter  into  a  tight  corner  in  seasons  of  great  demand,95 
and  especially  in  years  of  crises.  As  the  capital  of 
the  new  areas  increased,  it  was  apparent  that  the 
old-time  dependence  must  cease.  For  a  long  time 
1864-87  New  York  was  the  only  central  reserve  city,  as  we 
lgg7  have  seen,  then  Chicago  and  St.  Louis  were  added- 
But  both  these  cities  found  that  the  practice  of  doing 
business  in  New  York  was  deep-seated  and  conven- 
1894  ient.  Complaint  was  made  in  St.  Louis  that  its  busi- 
ness houses  continued  to  buy  drafts  on  New  York 
to  pay  their  debts  in  other  cities,  instead  of  simply 
sending  their  personal  checks  on  St.  Louis  banks. 9fi 
Although  the  process  of  decentralization  has  been  slow, 
the  progress  has  been  real  and  abiding.  When  at  last 
1914  twelve  Federal  Reserve  centers  were  created,  recogni- 
tion was  given  to  the  growing  financial  strength  of 
the  new  parts  of  the  country,  and  at  the  same  time  a 
heavy,  though  not  a  death,  blow  was  struck  at  the 
towering  financial  dominance  of  New  York  City.97 


METROPOLITAN  ECONOMY— ENGLAND        267 


The  attainment  of  financial  independence  is  a 
relative  matter  at  best.  It  does  not  mean,  of  course, 
that  the  fully-fledged  metropolis  has  no  further  deal- 
ings with  other  metropolitan  centers.  It  means  that 
normal  financial  needs  are  cared  for  by  reserves  held 
in  the  new  metropolis,  which  formerly  had  been  con- 
centrated in  the  old  one,  and  that  the  metropolis  is 
the  reservoir  into  which  the  fluid  resources  of  the 
area  run  and  from  which  they  flow  back  to  the  area, 
often  to  different  parts  of  the  area  than  those  from 
which  they  came. 

Among  these  equals — that  is,  the  well-developed 
metropolitan  centers  that  have  reached  the  financial 
phase,  there  are  inter-metropolitan  connections  of 
great  importance.  At  times  one  whole  metropolitan 
system  has  a  surplus  of  capital  while  another  has  a 
deficit.  It  is  obviously  of  advantage  to  both  that 
there  should  be  a  transfer  of  capital.  When  the 
American  Northwest  needs  capital  to  move  its  grain 
crop  the  eastern  metropolitan  centers  supply  it,  and 
then  later  the  situation  is  reversed.  In  time  of  a 
crisis  the  dependence  of  one  metropolis  upon  another 
is  apparent.  Paris  can  come  to  the  rescue  of  London, 
and  London  of  New  York,  and  New  York  of  the 
other  metropolitan  centers  of  America.  Of  course, 
at  such  a  time  the  help  can  best  be  given  in  gold,  but 
may  be  in  credit. 

Every  day  sees  a  change  in  the  indebtedness  of 
one  area  to  another.  The  area  that  cannot  send 
goods  must  send  money,  under  the  Federal  Reserve 
System,  gold  or  credit  for  gold.  In  other  words, 
there  is  a  favorable  and  an  unfavorable  balance  of 
trade  between  St.  Louis  and  New  York  as  there  is 
between  New  York  and  London.  And  in  both  cases 
of  inter-metropolitan  trade  whether  international  or 


Meaning 
of  finan- 
cial inde- 
pendence 


Inter- 
metro- 
politan 
financial 
relation- 
ship 


As  in 
1890 

As  in 
1907 


Foreign 
and  do- 
mestic 
metro- 
politan 
exchange 
rates 


268    INTRODUCTION  TO  ECONOMIC  HISTORY 


Fully  de- 
veloped 
metrop- 
olis and 
its  men  of 
business 


not,  the  balance  must  be  made  up  in  acceptable  cur- 
rency, preferably  gold.  The  metropolis  that  has  to 
send  gold  has  exchange  rates  against  it,  the  one  that 
receives  the  gold  has  the  rates  in  its  favor.  Both 
foreign  and  domestic  rates  may  be  learned  by  reading 
the  quotations  in  the  daily  papers.  In  one  essential, 
foreign  and  domestic  exchanges  are  the  same:  they 
both  reflect  the  balance  of  trade.  But  they  differ  in 
so  far  as  domestic  exchange  is  ordinarily  nowadays 
not  complicated  by  various  kinds  and  units  of  coins, 
while  in  foreign  exchanges  monetary  differences  are 
outstanding  features.  When  Chicago  has  to  send 
money  to  New  York,  only  the  balance  of  trade  enters 
into  the  situation;  while  Chicago  sending  money  to 
London  has  to  consider  the  equivalent  of  American 
dollars  in  English  pounds  sterling. 

We  have  often  spoken  of  the  fully  developed 
metropolis,  and  we  have  seen  that  it  means  the 
metropolis  that  has  reached  the  fourth  or  financial 
phase.  To  the  classes  of  business  men  that  character- 
ized the  town  under  town  economy  and  the  metrop- 
olis under  the  three  phases  indicated  above,  are 
added  many  money  middlemen.  Just  to  go  over  the 
list  of  business  men  found  in  the  fourth  phase  is 
bewildering:  retailers,  wholesalers,  jobbers,  indus- 
trial entrepreneurs,  commission  merchants,  brokers, 
drummers,  warehousemen,  elevator  men,  scoopers, 
shipowners,  shipmasters,  shipping  merchants  (ex- 
porters and  importers),  telegraph,  railroad,  and 
express  officials,  insurance  agents,  active  and  sleeping 
partners,  stockholders,  bondholders,  bankers,  trus- 
tees, speculators,  stockjobbers,  promoters,  under- 
writers. When  all  these  and  others  are  functioning, 
we  have  a  fully  developed  metropolitan  economy; 
when  not  only  goods  and  services  are  exchanged,  but 


METROPOLITAN  ECONOMY— ENGLAND        269 

capital  and  credit,   through  a  metropolitan,  organ- 
ization. 

We  may  visualize  the  fully  developed  metropolis 
very  crudely  in  this  way.     The  retail  section  is  the  Fully  de- 
survival  (and  extension)  of  the  trade  of  town  econ-  vel°Ped 

TM          i     i        1      f       •  r  i  metrop- 

omy.  The  wholesale  district  represents  the  first  phase  oils  visu- 
of  metropolitan  economy.  The  industrial  suburb  is  alized 
all  that  the  metropolis  has  (ultimately)  to  show  of 
the  second  phase  of  its  development.  The  great 
terminals  for  railroads  and  steamships  are  the  gen- 
erally ugly  memorials  of  the  third  phase.  And  the 
financial  district  stands  for  the  fourth  phase.  In 
London  it  is  Lombard  Street,  not  the  street  itself 
but  the  section  with  financial  institutions.  In  Boston 
it  is  State  Street,  in  New  York  Wall  Street,  and  in 
Chicago  La  Salle  Street.  Here  in  these  districts  are 
the  banks,  brokers'  offices,  stock  exchange,  and  insur- 
ance offices.  Here  is  the  most  sensitive  spot  in  the 
metropolitan  nerve  center. 

43.     SUGGESTIONS  FOR  FURTHER  STUDY 

1.  Clive  Day's  History  of  Commerce  (1907,  1920)  contains 
many  facts  bearing  indirectly  on  the  subject  of  town  and  metro- 
politan economy. 

2.  Read  A.  F.  Weber's  Growth  of  Cities  in  the  Ninteenth 
Century   (1899),  especially  chap.  III. 

3.  See  The  Evolution  of  the  English  Corn  Market  (1915) 
by  N.  S.  B.  Gras,  especially  chaps.  IV,  VII,  and  VIII. 

4.  Study  the  valuable  treatise  on  Middlemen  in  English 
Business,  particularly  between  1660  and  1760  by  R.  B.  Wester- 
field,  Transactions  of  the  Connecticut  Academy  of  Arts  and 
Sciences  (1915). 

5.  Read    The  Industrial  and   Commercial  Revolutions  in 
Great    Britain    during    the    Nineteenth    Century     (1921)    by 
L.  C.  A.  Knowles. 


270      INTRODUCTION  TO  ECONOMIC  HISTORY 

6.  See  J.  R.  Smith's  Industrial  and  Commercial  Geography 
(1913),  especially  pt.  II,  chaps.  XIII  and  XIV. 

7.  See  E.  W.  Kemmerer's  study  of  domestic  monetary  ex- 
change, Seasonal  Variations  in  the  Relative  Demand  for  Money 
and  Capital  in  the  United  States  (1910).    National  Monetary 
Commission.    Senate  Document  588,  6ist  Congress,  2d  Session. 

8.  For  a  brief  explanation  of  the  Federal  Reserve  bank- 
ing system  of  the  United  States,  see  H.  G.  Moulton's  Finan- 
cial Organization  of  Society  (1920),  and  Banking  and  Business 
by  H.  P.  Willis  and  G.  W.  Edwards  (1922). 

9.  What   factors  determine  the   location   of   metropolitan 
centers?     Consider  climate,  transportation  facilities,  direction 
of  trade,  and  raw  materials. 

10.  Compare   the   two   meanings   of    the   phrase   "metro- 
politan market,"    (a)    as  the  nucleus  itself,   and    (b)    as  the 
whole  unit  of  nucleus  and  hinterland.     Which  is  the  use  in 
trade  and  which  is  preferable  in  economic  history? 

11.  There  are  at  least  two  meanings  to  the  term  "organ- 
ization" in  economic  history:  the  one  informal,  showing  rela- 
tionships without  much  fixity  or  conscious  plan ;  the  other  for- 
mal with  a  constitution  based  on  agreement  and  plan  for  the 
future.     Could  you  say  that  the  metropolitan  economic  unit 
illustrates  the  first,  and  the  chamber  of  commerce  the  second? 
Any  other  illustrations? 

12.  All  five  stages,  including  metropolitan  economy,  have 
been  stages  in  the  evolution  of  production.     Each  has  shown  a 
certain  organization  for  procuring  a  living  based  on  a  division 
of  labor.    Review  all  five  stages  with  this  in  mind. 

13.  Why  is  it  preferable  to  use  the  term  "extended  trade" 
rather  than  "international   trade"  when  we  are  considering, 
not  customs  barriers  of  states  but  the  actual  exchange  of  goods? 

14.  Is  there  any  difference  between  inter-metropolitan  trade 
when  the  metropolitan  centers  are  within  the  same  state  and 
when  they  are  in  different  states? 

15.  What  is  the  connection  between  the  bill  of  exchange  and 
the  development  of  metropolitan  economy? 

1 6.  Do  you  regard  the  metropolitan  market  as  a  territory 
or  a  group  of  persons? 


METROPOLITAN  ECONOMY— ENGLAND         271 

17.  Why  is  it  that  at  first  prices  were  generally  higher  in  a 
metropolis  than  in  the  surrounding  hinterland,  while  to-day 
they  vary  greatly  according  to  commodities? 

1 8.  Is  it  true  to  say  that  the  farther  out  into  the  hinter- 
land we  go  the  nearer  we  are  in  a  general  way  to  the  conditions 
of  earlier  economic  stages? 

19.  Ruling  out  all  variations  in  the  qualities  of  the  soil, 
what  changes  in  agriculture  do  you  find  as  you  approach  the 
metropolis,  more  or  less  intensive  cultivation?    Why? 

20.  Study  carefully  the  changes   in   prices,   wages,    rents, 
and  rates  of  interest  as  you  leave  the  metropolis  for  the  outer 
parts  of  the  hinterland. 

21.  Is  it  true  that  the  checkerboard  of  towns  under  town 
economy  gave  way  to  the  spider  web  of  metropolitan  economy 
because  the  latter  was  more  efficient?     What  was  the  saving 
to  labor,  management,  and  capital  used  in  transportation,  stor- 
age, and  exchange  of  goods? 

22.  Are  we  justified  in  dealing  with  communication  under 
the  head  of  transportation? 

23.  Where  do  you  get  the  better  railroad,  highway,  tele- 
phone,   telegraph,    and    postal   service,    (a)    from    (or   to)    a 
metropolis,  or  (b)  around  a  metropolis  in  a  circular  or  ellip- 
tical way? 

24.  Comment:  the  village  mobilized  labor,  the  town  skill, 
and  the  metropolis  management  and  capital. 

25.  Are  the  following  cities  metropolitan  centers:    Ham- 
burg, Amsterdam,  Rotterdam,  Antwerp,  Bordeaux,  and  Bar- 
celona?   Which  are  hampered  by  political  boundaries? 

26.  If  there  were  no  political  boundaries  between  France, 
Belgium,   the  Netherlands,   and   Germany,   which   city  would 
probably  become  the  greatest  metropolis? 

27.  Is  it  a  safe  inference  that  one  of  the  motives  of  the 
German   leaders   in  the  late  war  was  to  strike   a   blow  for 
metropolitan    economy   in   Germany  with   the   Rhine   or   the 
Scheldt  valley,  or  both,  as  the  hinterland? 

28.  Are  there  any  metropolitan  units  in  Australia,   Scot- 
land, China,  Russia? 


272      INTRODUCTION  TO  ECONOMIC  HISTORY 

29.  Consider  the  three  cities  in  Russia:    Moscow,  Petro- 
grad,  and  Odessa.  On  what  does  the  prosperity  of  each  depend  ? 

30.  Some  see  a  great  commercial    future   for   Constanti- 
nople.    Why  did  this  city,  or  a  city  in  the  district,  arise  so 
late?     Why  has  it  experienced  prosperity  and  then  decline? 
On  what  does  its  future  depend  ?    Do  the  people  of  its  prospec- 
tive hinterland  show  much  capacity  for  increasing  productive 
and  purchasing  power  ? 

31.  In  so  far  as  the  French  Revolution  was  precipitated  and 
partly  caused  by  restrictions  in  internal  trade,  can  you  connect 
that  Revolution  with  the  development  of  metropolitan  market- 
ing in  France?     Consider  the  fact  that  local  famines  brought 
about  disturbance  and  rioting  before  the  Revolution  and  that 
the  cahiers  asked  for  the  removal  of  internal  tariffs. 

32.  Compare  the  financial  activities  of  Sir  Thomas  Gresham 
and  Mr.  J.  P.  Morgan,  Jr.,  as  to  (a)  kinds  of  operation,  (b) 
centers  of  business  activity,   (c)   amounts  of  capital  handled, 
and  (d)  relations  with  the  government. 

33.  Is   the   branch    banking   business  of   Great    Britain, 
Canada,  and  Australasia,  conducive  to  metropolitan  growth? 
Consider  the  concentration  of  reserves. 

34.  What  is  a  national  banking  system?     Is  it  not  essen- 
tially a  set  of  rules  to  guide  banks?     Is  not  the  banking  itself 
really  metropolitan   in   advanced  countries?     Is  not  banking 
essentially  a  matter  of  borrowing  and  loaning  capital  ?     Are 
these  not  actually  done  in  accord  with  metropolitan  organi- 
zation ? 

35.  In  what  way  are  crises  to  be  associated  with  metro- 
politan economy? 

36.  What  is  the  meaning  of  the  independence  (for  example, 
financial)  of  the  metropolis?    Does  it  mean  either  isolation  or 
absolute  independence? 

37.  Would  "Wall  Street"  have  been  possible  in  town  econ- 
omy?   What  is  its  relation  to  metropolitan  economy? 

38.  Who   oppose   "Wall   Street"   and    for  what   reasons? 
Consider    (a)    the  Congressional   investigation  of    1912-1913, 
and  (b)  the  bomb  explosion  on  Wall  Street,  September,  1920. 

39.  What  advantages  and  disadvantages  do  you  find  in 


METROPOLITAN  ECONOMY— ENGLAND         273 

metropolitan  economy?  Among  the  disadvantages  consider  the 
fact  that  numerous  people  derive  large  rewards  from  simply 
buying  and  selling  on  the  metropolitan  market.  Are  their 
rewards  commensurate  with  the  services  performed? 

40.  At  about  what  time  did  each  of  the  four  phases  of 
metropolitan  economy  develop  in  the  London  unit?    At  what 
time  in  other  units? 

41.  It  has  been  said  that  we  moderns  are  characterized  by 
a  restless  nervous  energy.     Do  you  correlate  this  with  metro- 
politan growth? 

42.  Characterize   the    psychic    or    mental    and    emotional 
makeup  of  people  in  each  of  the  five  stages.     Can  you  find 
individuals  who  even  now  roughly  conform  to  these  types? 

43.  Is  the  government  of  the  metropolitan  center  adequate 
to  the  needs  of  economic  development?     Should  we  not  have  a 
federation  of  all  chambers  of  commerce  in  the  metropolitan  dis- 
trict?    Would    such    a    federation    be   entirely    harmonious? 
Whence  would  come  the  cleavage? 

44.  Why  has  the  metropolis  had  such  influence  on  national 
government — in  legislation  and  administration?     Consider  the 
(common)  location  of  the  government  in  an  economic  metrop- 
olis, the  activities  of  the  metropolitan  chamber  of  commerce, 
the  great  influence  of  metropolitan  wealth,  and  above  all  the 
obvious  need  for  legislation  in  the  interest  of  already  established 
or  developing  metropolitan  trade. 

45.  Does  the  fact  that  there  are  super-metropolitan  centers, 
detract  from   the  theory  of  metropolitan  economy  any  more 
than  the  existence  of  powerful  or  super-states  detracts  from  the 
theory  of  national  sovereignty? 

For  further  references,  see  the  notes  that  follow. 

44.     NOTES  TO  CHAPTER  V 

1.  N.  Barbon,  "A  Discourse  of  Trade"    (1690)    in   Hol- 
lander's Reprint  of  Economic  Tracts  (1905),  p.  34. 

2.  N.  S.  B.  Gras,  The  Evolution  of  the  English  Corn  Mar- 
ket (1915),  PP.  73-75- 

3.  Usually  the  term  "metropolitan  market"   is  applied  to 


274      INTRODUCTION  TO  ECONOMIC  HISTORY 

the  nucleus  itself,  and  means  no  more  than  a  large  city;  for 
instance,  the  metropolitan  market  of  London  is  made  up  of  a 
group  of  over  seven  million  people  located  in  Greater  London. 

4.  Much   of   this   was   done   at   fairs,   but  gradually   the 
important  towns  took  over  the  function  of  liquidating  bills 
of  exchange. 

5.  See  R.  Ehrenberg,  Das  Zeitalter  der  Fugger  (1912), 
vol.  II,  pp.  3  f.,  et  passim. 

6.  J.  W.   Burgon,   The  Life  and  Times  of  Sir  Thomas 
Gresham  (1839),  vol.  I,  pp.  31,  409. 

7.  Ibid.,  vol.   II,  pp.   80,   345.     For  Gresham's  life  and 
work,  see  above,  p.  245. 

8.  A   Memorial  History   of  Boston    (ed.  by  J.  Winsor), 
vol.  II  (i88i),p.  441. 

9.  See  for  France,  E.  Vidal,  The  History  and  Methods  of 
the  Paris  Bourse  (1910),  pp.  85-86. 

10.  R.    R.    Sharpe,    London    and    the   Kingdom,    vol.    II 
(1894),  PP-  46-53. 

11.  Ibid.,  pp.  37-44. 

12.  A  contemporary  recognition  of  the  need  for  a  joint- 
stock  "in  long  and  dangerous  voyages"  is  found  in  the  argu- 
ments in  1604  concerning  the  trading  monopolies  of  London 
companies.    A.  E.  Bland,  Brown,  and  Tawney.    English  Eco- 
nomic History,  Select  Documents  (1914),  p.  449. 

13.  See  J.  Strieder,  Studien  zur  Geschichte  kapitalistischer 
Organisationsformen  (1914),  pp.  125-156;  W.  H.  Price,  The 
English  Patents  of  Monopoly  (1906)  ;  W.  R.  Scott,  The  Con- 
stitution and  Finance  of  English,  Scottish  and  Irish  Joint-Stock 
Companies  to   1720,  vol.  I    (1912).     Joint-stock  did  not  be- 
come a  very  important  factor  in  manufacturing,  however,  until 
the  igth  century.     Nor  did  it  become  common  on  the  Con- 
tinent till  that  time. 

14.  Not  all  the  companies  were  joint-stock,  some  being  of 
the  old  type,  the  regulated  company. 

15.  Paris  not  being  a  convenient  port,  the  different  French 
Companies  to   1720,  vol.   I    (1912).     Joint-stock  did  not  be- 
the  West   India   Co.   at   Le   Havre,    the   East   India   Co.   at 


METROPOLITAN  ECONOMY— ENGLAND         275 

L'Orient,  the  company  of  the  Levant  at  Marseille,  and  the 
Company  of  the  North  at  Dunkirk. 

16.  Cartulaire  de  I'Ancienne  Estaple  de  Bruges  (ed.  by  L. 
Gilliodts-van  Severn,  1904),  vol.  I,  pp.  19-21. 

17.  R.    B.   Westerfield,   Middlemen   in   English   Business, 
1660-1760  (1915),  PP-  366-367. 

1 8.  W.    Sombart,     The    Jews    and    Modern    Capitalism 
(1911,  1913),  PP-  138,  151. 

19.  N.  S.  B.  Gras,   The  Evolution  of  the  English   Corn 
Market  (1915),  p.  223  n.  I. 

20.  A.   P.    Usher,    The  History    of   the   Grain    Trade   in 
France,  1400-1710  (1913),  pt.  I,  chap.  II. 

21.  A.   Oncken,    Geschichte  der   Nationalokonomie,  pt.    I 
(1902),    p.    148;    H.    Sieveking,    Die    mittelalterliche    Stadt. 
Ein  Beitrag  zur  Theorie  der  Wirtschaftsgeschichte.     Viertel- 
jahrschrift    fur    Social-    und    Wirtschaftsgeschichte,    vol.    II, 
(1904),  p.  213;  G.  von   Below,  Probleme  der  Wirtschafts- 
geschichte (1920),  pp.  589-592. 

In  the  preceding  chapter,  the  town  was  regarded  as  the  seat 
of  individualism;  in  this  present  chapter,  it  is  held  to  be  the 
model  of  restraint  followed  by  the  growing  mercantilistic  state. 
The  contradiction  is  more  apparent  than  real.  Although  the 
town  system  was  mercantilistic,  the  spirit  of  revolt  against 
group  control  led  to  individualism  in  business,  art,  and  science — 
just  as  later  the  revolt  against  national  mercantilism  led  to 
national  liberalism  or  individualism  within  the  state. 

22.  Cf.     H.     I.   Bidermann,     Ueber    den    Merkantilismus 
(1870). 

23.  (John  Hales  in  1549).     A  Discourse  of  the  Common 
Weal  of  this  Realm  of  England  (1893),  p.  92. 

24.  See  H.  Pirenne,  Belgian  Democracy    (trans,  by  J.  V. 
Saunders,  1915),  pp.  202-208. 

25.  W.    Felkin,    History    of    Machine-Wrought    Hosiery 
(1867),  pp.  44,  59. 

26.  Ibid.,  pp.  44,  59-60. 

27.  L.  Roberts,  The  Merchants  Map  of  Commerce  (1638, 
1677),  p.  291. 


276      INTRODUCTION  TO  ECONOMIC  HISTORY 

28.  W.    Felkin,    History    of    Machine-Wrought    Hosiery 

(1867),  p.  437- 

29.  Ibid.,  p.  117. 

30.  Ibid.,  p.  227. 

3 1 .  Minutes  of  Evidence  before  Select  Committee  on  Manu- 
factures, Commerce,  and  Shipping   (1833),  vol.  VI,  p.  84. 

32.  Letter  Books  of  the  City  of  London,  vol.  E   (1903), 
P-  233- 

33.  G.  Unwin,  Industrial  Organization  in  England  in  the 
Sixteenth  and  Seventeenth  Centuries  (1904),  p.  25. 

34.  G.  I.  H.  Lloyd,  The  Cutlery  Trades  (1913),  p.  97. 

35.  Minutes  of  Evidence  before  Select  Committee  on  Manu- 
factures, Commerce,  and  Shipping    (1833),  vol.  VI,  p.   l8o; 
J.  R.  McCulloch,  Statistical  Account  of  the  British  Empire 
(1837),  vol.  II,  p.  113. 

36.  Its   disadvantage   in   procuring   Spanish   and    Swedish 
iron  for  making  the  finest  wares  was  real,  but  was  gradually 
overcome. 

37-  Minutes  of  Evidence  before  Select  Committee  on 
Manufactures,  Commerce,  and  Shipping  (1833),  vol.  VI,  pp. 
226-227. 

38.  E.  L.   Bogart  and   Thompson,  Readings   in   the  Eco- 
nomic History  of  the  United  States  ( 1916),  pp.  302-303  ;  B.  E. 
Hazard,  The  Organization  of  the  Boot  and  Shoe  Industry  in 
Massachusetts  before  1875  (1921),  pp.  81,   103,   107. 

39.  Boston  Board  of  Trade,  Fourth  Annual  Report  (1857  ) . 
p.  99. 

40.  The  Boston  Almanac  for  the  year  1850,  pp.  59-62. 

41.  Of  course  we  are  speaking  of  manufacture  for  sale, 
not  for  use.     Much  of  the  wholesale  handicraft  sprang  directly 
from  the  latter. 

42.  C.  A.  J.  Skeel,  Travel  in  the  First  Century  after  Christ 
with  special  Reference  to  Asia  (1901),  p.  65. 

43.  R.  Pohlmann,  Die  Ubervolkerung  der  antiken  Gross- 
stadte    (1884),  PP-   79-8o.     Of  course  Alexandria,   a  created 
town,  was  somewhat  different,  at  least  in  its  main  thorough- 
fares which  were  both  broad  and  straight. 

44.  Of  course,  part  of  the  trouble  is  that  the  metropolis 


METROPOLITAN  ECONOMY— ENGLAND         277 

frequently  overdoes  itself  in  the  provision  of  numerous  public 
utilities,  so  that  it  has  inadequate  funds  for  keeping  the  roads 
in  repair. 

45.  W.  T.  Jackman,  The  Development  of  Transportation 
in  Modern  England  (1916),  vol.  I,  pp.  58,  61,  65,  217,  218, 
226,  229,  232. 

46.  Ibid.,  pp.  266-279. 

47.  G.  Dodd,  The  Food  of  London  (1856),  pp.  317-318, 
336. 

48.  E.  M.  Avery,  A  History  of  the  United  States  and  its 
People,  vol.  VI  (1909),  p.  410  (map). 

49.  If  the  hard  surface  or  surface  layer  presents  sufficient 
slab  resistance,  then  the  solid  base  may  be  dispensed  with. 

50.  W.  T.  Jackman,  The  Development  of  Transportation 
in  Modern  England  (1916),  vol.  I,  p.  374. 

51.  Ibid.,  pp.  356-363- 

52.  Ibid.,  p.  376. 

53.  See    A.    Ure,     The    Cotton    Manufacture    of    Great 
Britain  (ed.  of  1861),  vol.  I,  p.  216;  W.  Vaughan,  Tracts  on 
Docks  and  Commerce  (1839),  P-  62. 

54.  B.  H.  Meyer,  History  of  Transportation  in  the  United 
States  before  1860  (1917),  p.  151. 

55.  G.  Dodd,  The  Food  of  London  (1856),  p.  228. 

56.  Boston  Board  of  Trade,  Second  Annual  Report  (1856), 

pp.  12-23- 

57.  Boston    Board    of     Trade,     Twenty-Seventh     Annual 
Report  (1881),  p.  17. 

58.  E.  R.  Johnson,  History  of  Domestic  and  Foreign  Com- 
merce of  the  United  States  (1915),  vol.  I,  pp.  186-189;  A.  H. 
Clark,  The  Clipper  Ship  Era,  1843-1869  (1910),  pp.  38-42. 

59.  See  Parcel  Post  in  Foreign   Countries,  United   States 
Congress,  Committee  on  Post  Office  (1912),  p.  31,  et  passim. 

60.  I.  Lippincott,   Economic  Development  of  the   United 
States  (1921),  pp.  244-245. 

61.  See  The  American  Year  Book,  vol.  for  1918,  p.  562; 
and  vol.  for  1919,  p.  556. 

62.  Strenuous  objection  was  made  to  the  establishment  of 
a  parcel  post  in  America  on  the  ground  that  town   retailers 


278      INTRODUCTION  TO  ECONOMIC  HISTORY 

would  be  injured.  See  Parcel  Post  in  Foreign  Countries, 
United  States  Congress,  Committee  on  Post  Office  (1912), 
pp.  29,  42,  95,  "7,  etc. 

63.  R.    Mayr,    Lehrbuch    der   Handelsgeschichte    (1907), 
pp.  129-130. 

64.  J.  C.   Hemmeon,  History  of  the  British  Post   Office 
(1912),  p.  16. 

65.  Cf.  R.  B.  Westerfield,  Middlemen  in  English  Business, 
1660-1760  (1915),  p.  420. 

66.  Annual  Report  of  the  Postmaster-General  -  -  -  June 
30,  1919  (1919),  PP-  14-20. 

67.  See  C.  Bright,  The  Story  of  the  Atlantic  Cable  (1903), 
chaps.  I,  X,  XIV-XVI.    The  projector  (Cyrus  Field)  was  an 
American ;  the  capital,  skill,  and  labor  were  English. 

68.  N.  S.  B.  Gras,   The  Evolution  of  the  English   Corn 
Market   (1915),  pp.  199-209. 

69.  It  was  nevertheless  possible  for  Clay  and  others  to  sup- 
port a  policy  of  both  protection  in  trade  and  improvement  in 
internal   transportation. 

70.  See  below,  §49,  pp.  316-322. 

71.  See  above,  p.  190. 

72.  A  Collection  of  the  Names  of  the  Merchants  living  in 
and  about  the  City  of  London    (1677,  reprint  1863),  last  8 
pages. 

73.  Sir  Francis  Child,  not  Sir  Josiah  Child  the  merchant. 
Child   and   Co.  claim  to  have  been   established   before    1600. 
Bankers'  Almanac  and  Year  Book  for  1919-20,  p.  70. 

74.  R.  Ehrenberg,  Das  Zeitalter  der  Fugger  (1912),  vol. 
II,  pp.  311,  352-356.    The  exchange  was  for  trading  in  goods 
as  well  as  securities. 

75.  S.  S.  Pratt,  The  Work  of  Wall  Street  ( 1919) ,  pp.  5,  8. 

76.  C.  Duguid,  The  Story  of  the  Stock  Exchange  (1901), 
pp.  44-45- 

77.  Sir  Josiah  Child,  quoted  in   R.  B.  Westerfield's  Mid- 
dlemen in  English  Business,  1660-1760  (1915),  p.  420. 

78.  G.  Chalmers,  Considerations  on  Commerce  (1811),  pp. 
2l8-22O. 


METROPOLITAN  ECONOMY— ENGLAND         279 

79.  A.  Andreadcs,  History  of  the  Bank  of  England  (1909), 
p.  113. 

80.  See  R.  C.  H.  Catterall,  The  Second  Bank  of  the  United 
States  (1903),  P.  377  (map). 

8 1.  The  Correspondence  of  Nicholas  Biddle  (ed.  by  R.  C. 
McGrane,  1919),  pp.  31-32,  252. 

82.  J.  W.  Gilbart,   The  History,  Principles,  and  Practice 
of  Banking  (1896),  vol.  I,  p.  70;  vol.  II,  p.  124. 

83.  Cf.  W.  R.  Bisschop,  The  Rise  of  the  London  Money 
Market,  1640-1826  (1896,  1910),  pp.  167,  217. 

84.  Many  of  the  facts  in  this  paragraph  are  taken  from 
the  Bankers'  Magazine   (1844  f.)   and  from  the  Bankers'  Al- 
manac and  Year  Book  for  IQIQ-2O. 

85.  Because  of  the  difficulty  of  distinguishing  between  a 
merchant  carrying  balances  (and  transacting  some  banking  for 
his  customers)  and  an  out-and-out  banker,  the  origin  of  early 
private  banks  is  obscure.     Claim  is  made  that  one  hinterland 
bank  was  founded  as  early  as  1688. 

86.  Cf.  G.  Chalmers,  Considerations  on  Commerce  (1811), 
p.  224. 

87.  The   Bank  of   North   America  was  opened   in   Phila- 
delphia in   1782,  and  the  Massachusetts  Bank  in  Boston  and 
the  Bank  of  New  York,  in  New  York  City,  both  in  1784. 

88.  This  is  a  national  banking  systerh,  not  including  the 
state  banks.     See  the  laws  of   1864,    1874,   1887,  and   1903. 
Until  1874,  these  balances  were  chiefly  for  the  redemption  of 
bank  notes  presented  in  the  larger  centers,  but  were  also  held 
against  deposits,   if  I   read   the  law  aright.     From  that  date 
onward  they  were  kept  only  against  deposits. 

89.  And  the  number  of  reserve  cities  might  be  increased 
to  include  any  city  of  a  population  of  50,000  or  over  beginning 
in  1887,  and  from  1903  onward  any  city  having  a  population 
of  25,000  or  more.     The  number  in  1914  was  46. 

90.  Data  concerning  life  insurance  are  taken  from  C.  K. 
Knight's   History   of  Life  Insurance  in   the   United  States  to 
1870,  University  of  Pennsylvania  (1920),  pp.  12-119. 

91.  Branch  banks  were  (1910)  prohibited  in  at  least  eight 
and  perhaps  nine  states,  and  specifically  allowed  in  only  ten  or 


a8o      INTRODUCTION  TO  ECONOMIC  HISTORY 

possibly  eleven.  The  national  banking  laws  allow  branch  state 
banks  to  enter  the  national  system  and  they  permit  national 
banks  to  form  branches  in  foreign  countries  under  certain  con- 
ditions. 

92.  S.  S.  Pratt,  The  Work  of  Wall  Street  (1919),  p.  9. 

93.  G.   Chalmers,    Considerations   on   Commerce    (1811), 
pp.  228  f. 

94.  Liverpool:  its  Trade  and  Commerce   (1918),  pp.  93, 
94,  98. 

95.  See  the   Commercial  and  Financial  Chronicle   (Nov. 
29,  1890),  pp.  730-732. 

96.  J.  Cox,  Old  and  New  St.  Louis  (1894),  P-  9O. 

97-  See  Location  of  the  Reserve  Districts  in  the  United 
States  (1914),  Senate  Document  485,  63d  Congress,  2d  Ses- 
sion, pp.  289,  297. 


CHAPTER  VI 


METROPOLITAN   ECONOMY,    CHIEFLY  IN  AMERICA 

45.  METROPOLITAN  RIVALRY.  The  fourth  phase 
of  metropolitan  economy  was  not  reached  without 
a  struggle.  The  developing  metropolis  has  to  meet 
the  competion  of  other  aspiring  centers  at  home  and 
abroad.  One  of  the  early  outstanding  instances  of 
rivalry  was  between  London  and  Amsterdam.  Both 
had  East  India  companies  that  were  the  center  of 
attraction  of  the  western  European  business  world. 
Both  had  a  foothold  in  North  America,  Amsterdam 
at  New  Amsterdam  and  London  in  the  colonies  both 
to  the  north  and  south.  Their  rivalry  was  embodied 
in  the  British  navigation  acts  and  ended  in  two  naval 
wars,  in  both  of  which  Britain  was  the  victor.  New 
Amsterdam  became  New  York,  a  powerful  auxiliary 
in  the  hands  of  Englishmen  in  their  contest  with  the 
French  to  the  north. 

Britain  had  no  sooner  ended  its  struggle  with  the 
Dutch  than  it  began  one  with  the  French.  Sir  John 
Seeley  has  taught  us  to  look  upon  that  struggle  as  the 
second  Hundred  Years'  War.  The  first  Hundred 
Years'  War  had  been  dynastic;  this  one  was  com- 
mercial. We  may  rightly  call  it  an  Anglo-French 
contest,  for  both  nations  exerted  their  full  strength, 
at  least  toward  the  close  of  the  period  of  strife. 
But  in  a  special  sense  it  was  a  London-Paris  contest. 
Each  city  was  unquestionably  the  center  of  much  of 
the  trade  of  the  nation,  though  Paris  was  not  a  port 

281 


London 
vs. 

Amster- 
dam 


1 7th 
century 


1652-54 
1666-67 
1667 


London 

<vs. 

Paris 


1688-1815 


282    INTRODUCTION  TO  ECONOMIC  HISTORY.' 


American 
rivals 

1783 


of  such  easy  access  as  London.  Each  had  its  trad- 
ing companies,  and  the  merchants  of  each  had  their 
eyes  on  India,  the  East  and  West  Indies,  and  North 
America.  Each  had  its  outposts  threatening  the  out- 
posts of  the  other.  London  was  strong  in  New 
York,  and  Paris  at  first  in  Montreal  and  later  in 
New  Orleans.  As  everybody  knows,  the  contest  of 
a  century  was  at  last  ended  by  the  defeat  of  Napoleon 
and,  we  may  add,  the  victory  of  London. 

For  a  time  the  political  fortunes  of  New  York, 
Montreal,  and  New  Orleans  were  as  diverse  as  pos- 
sible. New  York  became  part  of  the  United  States 
during  the  Revolution,  while  Montreal  remained  in 
the  possession  of  Britain,  and  New  Orleans  in  the 
control  of  Spain.  But  these  trading  towns,  all  aspir- 
ing to  dominate  their  respective  areas,  continued  to 
be  rivals  in  the  same  way  as  before. 

Both  New  York  and  Montreal  competed  for  the 
fur  trade  with  the  Indians.  Both  probably  drew  upon 
western  New  York  State  for  their  grain  supplies, 
Montreal  New  York  by  means  of  the  Hudson  and  Mohawk 
Rivers  and  Montreal  by  means  of  the  St.  Lawrence 
River,  Lake  Erie,  and  the  Genesee  River.  New 
York  was  easily  the  victor,  especially  after  the  con- 
struction of  the  Erie  Canal.  But  Montreal's  answer 
to  this  was  the  Welland  and  St.  Lawrence  River 
canals.  When  railroads  were  built,  the  old  contest 
continued,  only  in  a  new  form.1  Later  the  competi- 
tion breaks  out  again,  where  it  now  stands,  between 
New  York  with  its  new  Barge  Canal  and  Montreal 
with  its  improved  Welland  Canal  and  the  proposed 
St.  Lawrence  power  and  ship  canals.  New  York 
is  standing  out  strongly  against  the  last-named,  fear- 
ing a  diversion  of  its  trade.  The  struggle  between 
these  two  centers  has  long  been  unequal,  because, 


New 
York 

<vs. 


1825 

1829 
1824-47 


METROPOLITAN  ECONOMY— AMERICA 


283 


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284    INTRODUCTION  TO  ECONOMIC  HISTORY 

while  Americans  have  developed  a  hinterland  for 
New  York  very  rapidly,  Canadians  have  performed 
a  similar  service  for  Montreal  very  slowly.  The 
striking  handicap  of  Montreal  itself  is  the  fact  that 
its  port  is  frozen  up  during  the  winter  and  for  much 
of  the  remainder  of  the  year  transportation  on  the 
St.  Lawrence  is  hazardous  because  of  fogs. 

A  more  serious  rival  for  New  York  was  New 
New  Orleans.  New  York  had  behind  it  the  rich  grain 
^  section  of  the  Great  Lakes  even  to  Chicago  and  be- 

New  yond,  first  accessible  by  water  and  later  also  by  rail. 
Orleans  j^w  Orleans  had  the  equally  rich  Mississippi  valley 
as  far  as  St.  Louis  and  beyond.  New  York  pushed 
into  the  Ohio  Valley  through  the  canals  from  Cleve- 
land and  Toledo,  and  into  the  upper  Mississippi  val- 
ley through  the  Illinois  Canal  from  Chicago.  Al- 
though the  imports  of  New  Orleans  have  been  insig- 
nificant when  compared  with  those  of  New  York, 
1830*8  nevertheless,  for  a  time,  the  exports  of  the  two  rivals 
were  about  equal,  first  one  leading  slightly,  then  the 
other.  In  the  steamboat  period  before  the  Civil 
War,  New  Orleans  flourished,  but  the  railroads  tap- 
ping the  Mississippi  valley  at  many  places  ran  mostly 
east  and  west  and  robbed  it  of  its  influence  in  the  hin- 
terland. We  may  express  it  in  another  way:  New 
York  looked  to  the  excellent  markets  of  Europe, 
especially  London  and  Liverpool;  while  New  Orleans 
was  nearer  Central  and  South  America,  quite  inferior 
consuming  districts.  In  the  period  before  the  Civil 
War,  New  York  was  gaining,  but  the  victory  was  not 
decided  until  the  war.  Since  then  New  Orleans  has 
really  been  out  of  the  race.2 

Chicago  While  New  York  was  gaining  in  its  rivalry  with 
New  New  Orleans,  its  outpost  Chicago  was  showing  in- 
York  dependence  and  developing  ambitions  of  its  own. 


METROPOLITAN  ECONOMY— AMERICA          285 

Its  great  advantages  of  location  in  a  super-rich  area, 
and  its  connections  by  rail  and  water,  pointed  to  a 
great  future.  After  the  panic  of  1873,  we  note 
Chicago's  increasing  commercial  independence  with 
the  location  of  the  branches  of  many  New  York 
houses  there;3  and  after  the  law  of  1887,  making  it 
a  central  reserve  city,  we  can  see  more  and  more 
financial  independence.4 

The  law  that  made  Chicago  a  central  reserve  city 
placed  St.  Louis  in  the  same  position.  This  was  a  Chicago 
recognition  not  only  of  central  location  but  also  of  *t  Louis 
commercial  and  financial  standing.  St.  Louis  had 
been  established  very  early  as  a  trading  outpost  of 
New  Orleans.  In  it  centered  the  fur  trade  of  the 
Upper  Mississippi  and  Missouri  Rivers,  and  the 
Oregon  and  Santa  Fe  trails.  Later  it  became  a  grain 
and  flour  center,  and  in  fact  a  well-developed  metrop- 
olis by  1887,  substantially  on  a  par  in  function,  if 
not  in  resources,  with  Chicago  and  New  York.  Paris 
might  fail  as  against  London,  and  New  Orleans  as 
against  New  York,  but  St.  Louis  succeeded  as  against 
Chicago,  at  least  to  the  extent  of  attaining  metropol- 
itan proportions.  It  has  long  claimed  that  some  day 
it  will  be  the  greatest  commercial  city  in  the  United 
States — that  is  perhaps,  when  trade  goes  not  only 
east  and  west  but  north  and  south. 

The  line  of  rivalry  passes  now  from  Chicago  and 
St.  Louis  to  the  Twin  Cities  and  Kansas  City.5     At   i89o's 
present  the  rivalry  of  these  two  centers,  backed  by  Kansas 
their  respective  districts,  has  manifested  itself  in  their  £jty 
race  for  supremacy  in  the  grain  and  flour  business,   Twin 
and  in  the  official  recognition  of  each  as  a  Federal 
Reserve  center,  the  concentrating  point  for  the   fi-   1914 
nances  of  the  district. 

We   can   hardly   extend    this   competition    to    the 


286    INTRODUCTION  TO  ECONOMIC  HISTORY 


Pacific 

Coast 

cities 


Ambi- 
tious new 
centers 


Rivalry 
of  Atlan- 
tic ports 


Pacific  Coast  district,  for  that  district  has  had  a 
history  peculiar  to  itself.  It  is  not  a  mere  extension 
of  the  East.  And  yet,  there  is  a  strong  promise  of  a 
rival  for  San  Francisco  in  the  growth  of  Seattle  as 
a  trading  center,  one  in  which  the  commerce  of 
Oregon,  Washington,  Montana,  and  Alaska,  is  fast 
concentrating.  But  as  yet  Seattle  is  quite  inferior, 
and  to  a  considerable  extent  subordinate,  to  San  Fran- 
cisco. Their  relative  positions  are  roughly  indicated 
by  the  fact  that  San  Francisco  has  the  Federal  Re- 
serve Bank,  while  Seattle  has  only  a  branch  of  this 
bank.  But  it  is  not  unlikely  that  Seattle  will  be  made 
into  a  Federal  Reserve  city  if  the  Federal  banking 
districts  are  reallotted. 

As  these  two  lines  of  rival  metropolitan  cities  have 
been  extended  westward,  other  centers  have  striven 
to  make  their  voices  heard.  Often  that  has  been  the 
only  success  they  have  attained — notoriety.  Some  of 
these  have  sought  to  work  themselves  in  between  the 
metropolitan  centers  on  the  line  of  their  north  and 
south  trade,  but  more  often  it  has  been  along  the  line 
of  the  east  and  west  trade.  Buffalo,  Cleveland, 
Toledo,  and  Detroit  sought  to  carve  out  areas  of 
metropolitan  dominance,  to  form  a  middle  kingdom 
of  their  own,  in  between  New  York  and  Chicago. 
Only  Cleveland  has  succeeded  to  any  great  extent, 
and  that  in  the  face  of  the  rivalry  of  Cincinnati. 

But  there  was  a  struggle  loud  and  long  between  the 
Atlantic  ports,  New  York,  Boston,  Philadelphia,  and 
Baltimore,  not  only  for  the  north  and  south  coast 
trade  and  for  the  overseas  trade  but  for  the  east  and 
west  inland  trade.  By  every  peaceful  means  possible 
each  of  these  cities  has  endeavored  to  outdo  its  rivals, 
by  constructing  highways,  canals,  and  railroads,  as  we 
have  seen,  by  establishing  transatlantic  lines  for 


METROPOLITAN  ECONOMY— AMERICA          287 

freight  and  passengers,  and  by  getting  as  low  land 
and  water  rates  from  and  to  its  ports  as  could  be 
secured.     They  have  been  rivals   for  grain,  cattle, 
coal,  general  merchandise,  and  the  passenger  trade. 
Up  to  1750  Boston  led  in  population.     By  1760 
Philadelphia  was  ahead  of  Boston  and  by  1770  New  Boston 
York  also  had  passed  Boston.     By  1790  New  York  ^w 
had   outdistanced   Philadelphia   and   has  maintained  York  in 
the  lead  ever  since.     Mere  size,  however,  is  a  secon-   8hlPPine 
dary  consideration,  as  we  have  already  noted.     It  is 
function  that  counts,  but  in  these  cases  function  and 
population  keep  pretty  well   abreast.      Boston,   and 
towns  in  the  Boston  group,  had  played  a  prominent 
part  in  trade  with  the  Orient  and  the  West  Indies,   Early 
but  soon  Boston  and  New  York  became  keen  rivals  century 
for  this  trade.     When  the  Boston  harbor  froze  up   ^44 
and  the  Cunard  steamer  Britannia  could  therefore 
not  leave  port,  the  business  men  of  New  York  smiled 
with  satisfaction,  but  Bostonians  aroused  themselves, 
broke  the  ice,  and  allowed  the  ship  to  sail  on  sched- 
uled time.     The  event,   however,  was  ominous,   for 
later  the  Cunard  line  decided  on  New  York  in  pref- 
erence  to   Boston,   and   for  three  years   no   regular   1868-71 
steamship  plied  directly  between  Boston  and  Liver- 
pool.    Boston  had  already  lost   to   New  York  not 
only  much  of  the  distant  oversea  trade,  as  for  instance 
to  the  Orient,  but  the  service  of  fast  liners  to  Eng- 
land.    The  movement  of  merchants  from  Boston  to 
New  York  was  prominent  just  before  the  Civil  War.   1830-60 
The  records  of  the  Boston  Board  of  Trade  constitute 
one  long  chronicle  of  unsuccessful  rivalry  with  New 
York.     And  yet  as  late  as  1857  Boston  proudly  dis- 
played figures  showing  that,  while  2842  ships  arrived 
in  her  port  from  foreign  countries,  only  a  few  more, 
2990,  entered  New  York.     And  the  claim  that  was 


288    INTRODUCTION  TO  ECONOMIC  HISTORY 


Boston 
vs. 

New 
York  in 
hinter- 
land 
trade 


Boston's 
inde- 
pendence 
in  manu- 
facturing 


1850*8  f. 


made  then  was  that  half  the  ships  arriving  in  New 
York  from  China  were  owned  in  Boston.6  This  was 
a  damaging  confession  of  the  superiority  of  New 
York  as  a  trading  center,  with  which  Boston  ships 
found  more  profit  in  trading  than  with  the  home  port. 

In  hinterland  trade  as  well  as  in  extended  commerce 
did  Boston  contend  with  New  York.  Up  to  the  time 
of  the  railroads,  Boston's  chief  trade  was  in  Massa- 
chusetts,7 largely  indeed  in  the  eastern  part  of  the 
state.  The  Connecticut  River  directed  the  trade  of 
the  states  of  Connecticut,  New  Hampshire,  and  Ver- 
mont more  to  New  York  than  to  Boston;8  and  Long 
Island  Sound  provided  a  safe  route  from  Rhode 
Island  and  Connecticut  to  New  York.  But  railroads 
saved  the  day  for  Boston.  Her  tea  merchants  may 
have  gone  to  New  York,  as  we  have  seen,  and  many 
of  her  commission  houses  too,  but  local  trade  was 
gradually  centered  in  Boston,  so  that  New  England 
became  something  like  an  economic  unit.  Although 
New  York  is  still  a  keen  competitor  for  New  Eng- 
land's trade,  and  still  has  much  of  it  on  the  westward 
fringes,  especially  in  Connecticut,  Boston  possesses 
the  key  to  the  situation. 

With  a  firm  hold  upon  the  trade  of  the  hinterland, 
Boston  had  still  to  fight  to  prevent  itself  and  its  area 
from  becoming  the  industrial  tributary  of  New  York. 
The  danger  was  that  New  England  would  become  the 
workshop  of  New  York,  making  the  cloth  that  New 
York  sold  elsewhere  either  in  the  piece  or  as  finished 
garments.  In  this  contest  Boston  lost  very  largely 
as  far  as  textiles  (especially  cottons)  were  concerned, 
but  its  developing  boot  and  shoe  industry  gave  it  a 
measure  of  independence  that  is  very  real  and  very 
striking.  The  manufacture  of  small  metal  parts, 
certain  kinds  of  machinery,  and  a  host  of  miscellane- 


METROPOLITAN  ECONOMY— AMERICA          289 

ous  articles,  helped  to  round  out  the  industrial  devel- 
opment of  the  Boston  metropolitan  area. 

Boston  contested  just  as  strenuously  New  York's  Boston 
ambition  to  dominate  the  whole  American  market,  J£ 
especially  in  the  South  and  the  West,  as  it  did  New  York  in 
York's  designs  upon  New  England  itself.    When  the  aJ^ 
railroad  lines  from  Albany  to  Buffalo  were  finished, 
Boston  had  a  railroad  ready  to  seize  its  share  of  the 
western  trade.     Both  Boston  and  New  York  con- 
solidated their  respective  railroad  systems  for  the 
competitive  advantages  involved.    Efforts  were  made 
to  have  the  Grand  Trunk  Railroad  of  Canada  locate  1856 
its  terminal  at  Boston.    And  when  New  York  favored 
a  canal  around  the  falls  at  Niagara,  to  further  the 
Great  Lakes   trade   centering  in  New  York  City,   1863 
Boston  objected.     But  Boston  had  one  very  serious 
handicap:    its  hinterland  was  hilly  and  the  haul  of 
goods  up  grade  was  expensive.    Boston,  too,  is  a  hun- 
dred miles  farther  from  Chicago  than  New  York  is. 
Accordingly,  railroad  rates  on  goods  from  the  West 
were  higher  than  to  New  York.  For  instance,  it  cost 
ten  cents  a  barrel  more  to  ship  flour  from  Chicago  to 
Boston  than  from  Chicago  to  New  York.9    Accord-  1881 
ingly,  Boston's  percentage  of  the  export  trade  of  the 
West  has  not  been  so  high  as  New  York's. 

In  financial  matters  Boston  and  New  York  have  Boston 
been  rivals.     New  York's  business  might  be  greater,   ™ew 
but  New  England's  saving  propensities  were  to  be  York  in 
reckoned  with.     The  situation  is  similar  in  the  case 
of  London   and  Paris.     London  has  drawn  its  re- 
sources from  the  great  gains  of  Englishmen;    Paris 
from  the  savings  of  Frenchmen.    The  people  of  New 
York  and  Boston  used  their  financial  resources  not 
only  to  develop   their  own  hinterland  but  to  build 
railroads  and  telegraph   and  telephone  lines  in  the 


290    INTRODUCTION  TO  ECONOMIC  HISTORY 

West.  Here  the  two  competed,  with  what  compara- 
tive success  it  is  hard  to  determine.  It  was  said  that 
Boston  just  about  equalled  New  York  in  the  amount 
1886  invested  in  state  and  national  banks,  but  that  it  was 
far  behind  in  the  money  available  for  call  loans  and 
in  bankers'  balances.10  The  victory  was  New  York's 
and  it  has  been  remarkable,  but  it  was  a  victory  that 
involved  not  Boston's  financial  subordination  but 
merely  inferiority.  When  the  banks  were  given  a 
chance  to  express  their  preference  for  a  financial 
1914  center,  287  in  New  England  voted  in  favor  of  Boston 
while  only  106  voted  in  favor  of  New  York,  most 
of  the  latter  being  in  Connecticut.11 

On  the  south,  New  York's  competitors  were  Phila- 
Phila-  delphia  and  Baltimore.  President  Washington  is 
^  p  1  reported  to  have  said  that  the  commercial  cities  of 
New  Baltimore  and  Washington  had  great  futures,  that 

Vrn-t 

New  York  would  maintain  its  eminence  and  that 
Philadelphia  would  decline.12  No  part  of  this  pro- 
phecy has  been  quite  fulfilled,  except  that  Philadelphia 
would  decline — that  is,  relatively.  At  one  time  Phila- 
centuryth  delphia  was  not  only  the  political  capital  of  the 
United  States,  but  the  most  populous  city,  and  the 
one  regarded  as  the  most  eminent  commercially  and 
financially.  Gradually  its  leadership  has  passed  to 
New  York.  The  two  cities  competed  for  foreign 
commerce,  for  the  trade  of  the  intervening  territory, 
for  the  grain  of  the  Genesee  Valley,  the  coal  of  east- 
ern Pennsylvania,  and  the  foodstuffs  and  raw  products 
of  the  great  West.  As  we  have  seen,  the  competition 
for  western  trade,  first  to  round  out  their  territories 
and  later  to  develop  domestic  inter-metropolitan 
trades,  led  to  the  construction  of  highways,  canals, 
Since  and  railways.  The  long  period  of  struggle  was  prac- 
i7^'t  tically  closed  in  the  decade  before  the  Civil  War  by 


METROPOLITAN  ECONOMY— AMERICA          291 

the  unquestioned  victory  of  New  York.  Its  dramatic 
year  was  1851-52,  when  New  York  finished  the  Erie 
and  the  Hudson  River  Railroads  and  obtained  all- 
rail  connections  with  Chicago,  and  when  the  Pennsyl- 
vania Railroad  was  completed  from  Philadelphia  to 
Pittsburgh.  Both  Chicago  and  Pittsburgh  had  been 
accessible  by  a  combination  of  rail  and  water  service, 
but  now  they  were  linked  with  the  east  by  all-rail 
routes.  Chicago,  however,  was  900  miles  away  and 
Pittsburgh  only  350.  The  difference  in  the  distance 
roughly  marked  the  extent  of  New  York's  victory. 

The  contest  between  New  York  on  the  one  hand 
and  Philadelphia  (and  Baltimore)   on  the  other  was   s*nce 
continued  in  a  long-drawn-out  series  of  rate  wars13   i874 
lasting  down  almost  to  the  present  time.     Baltimore 
was  nearest  to  Chicago,   the  great  shipping  center.   New 
Philadelphia  was  just  a  few  miles  farther,  and  New  railroad 
York  almost   a   hundred  miles   farther   still.      New   rates 
York  argued  that,  though  the  railroads  serving  its 
competitors  did  not  have  to  haul  the  goods  so  far, 
they  had  to  carry  them  up  and  down  steep  grades. 
On    the    other    hand,    Baltimore    and    Philadelphia 
claimed  and  actually  had  the  advantage  of  cheaper 
coal.     Although  the  rates  varied  from  time  to  time, 
Baltimore  was  given  the   advantage   over   Philadel- 
phia,   and    Philadelphia    over    New   York.     It   was 
agreed  that  this  just  offset  New  York's  advantage  in 
lower  ocean  rates,  and  when  New  York  lost  these 
lower  water  rates  it  was  at  a  real  disadvantage  as 
compared  with  its  neighbors.     It  is  a  bit  surprising 
to   find  New  York  with   so  large   a   percentage   of 
exports  and  imports  still  looking  so  jealously  to  its 
neighbors'  advantages.14 

In  finance,  Philadelphia  had  the  headstart,  an  in-   1791-1811 
heritance  from  the  days  of  town  economy.  The  First   1816-36 


292    INTRODUCTION  TO  ECONOMIC  HISTORY 


1864-87 


1914 


New 

York  as  a 
financial 
center 


Eleven 
metro- 
politan 
units  in 
America 


1900-20 


1914 


and  Second  United  States  Banks  were  located  there, 
while  only  branches  existed  in  New  York  and  Balti- 
more. But  the  national  banking  system  made  New 
York  the  sole  central  reserve  city,  in  recognition  of 
its  outstanding  position,  and  Philadelphia  and  Balti- 
more just  reserve  cities.  When  the  banks  were  later 
asked  to  state  their  preference  for  a  Federal  Reserve 
city,  twice  as  many  located  in  New  Jersey  voted  for 
New  York  as  for  Philadelphia,  and  even  a  goodly 
number  in  eastern  Pennsylvania  preferred  New  York. 
Baltimore  was  not  made  a  Federal  Reserve  city  at 
all.  New  York's  financial  pre-eminence  is  now  so 
great  in  the  East  that  it  has  no  close  second.  Chicago, 
far  afield,  is  really  a  second  but  a  rather  poor  one. 
In  New  York  six  times  as  much  money  changes  hands 
every  week  as  in  Chicago,15  though  the  population  of 
the  metropolitan  center  of  New  York  is  only  about 
two  and  one-half  times  that  of  Chicago. 

46.      METROPOLITAN       ECONOMY       IN       AMERICA. 

When  we  study  metropolitan  organization  in  Amer- 
ica, not  from  the  standpoint  of  rivalry  but  of  present- 
day  attainment,  we  find  about  eleven  metropolitan 
centers  with  their  respective  areas.  These  are  all 
full-grown;  in  other  words,  they  have  reached  the 
financial  phase  of  their  development.  These  eleven 
are  New  York,  Chicago,  St.  Louis,  Philadelphia, 
Boston,  Cleveland,  the  Twin  Cities,  Kansas  City,  San 
Francisco,  Baltimore,  and  Cincinnati.16  The  first  nine 
of  these  are  growing  absolutely  and  relatively,  the  last 
two  absolutely  but  not  relatively.  No  one  would 
hesitate  to  accept  the  first  five  and  San  Francisco. 
Only  a  study  of  the  situation  would  add  the  others. 

When  the  Federal  Reserve  cities  were  chosen,  all 
the  metropolitan  centers  above  mentioned  were 
selected,  with  the  exception  of  the  last  two.  We  are, 


METROPOLITAN  ECONOMY— AMERICA 


293 


of  course,  not  specially  concerned  with  the  considera- 
tions that  led  to  the  selection  of  the  twelve  Federal 
Reserve  cities,  but  the  failure  to  choose  Baltimore 
and  Cincinnati  is  interesting. 

Although  Baltimore  was  founded  late,  as  compared 
with  some  of  its  northern  rivals,  it  made  rapid  prog- 
ress, doubling  its  population  in  one  decade.  Its  early 
promise  has  not  been  maintained,  however,  for  in 
canal  and  railroad  construction  Baltimore  lagged 
behind  New  York  and  Philadelphia.  Then  it  made 
slight  effort  to  extend  its  hinterland  southward. 
Although  its  dominance  over  its  rather  restricted  area 
westward  was  very  real  in  general  commerce,  trans- 
portation, and  finance,  still  its  outstanding  success 
was  as  a  port  of  shipment. 

Cincinnati  was  at  first  a  commercial  tributary  of 
New  Orleans.  Later  its  trade  developed  with  the 
eastern  cities,  notably  with  Baltimore  and  Philadel- 
phia. In  its  manufactures  it  suffered  from  rivalry 
with  other  centers,  in  iron  wares  with  Pittsburgh,  in 
meat  packing  with  Chicago,  in  the  clothing  industry 
with  New  York  and  Chicago,  and  in  the  shoe  industry 
with  Boston  and  Philadelphia.  Although  Cincinnati 
has  developed  a  metropolitan  organization,  that 
organization  is  apparently  dwindling  away.  Cincin- 
nati has  suffered  from  three  misfortunes.  It  has  no 
adequate  water  transportation;  it  is  not  favorably 
located  for  the  iron  and  steel  industry;  and  it  is  not 
on  the  main  line  of  east  and  west  traffic.  When  New 
York  triumphed  over  New  Orleans,  Cleveland  became 
a  rival  of  Cincinnati.  Cleveland  is  not  greatly  ahead, 
but  both  it  and  its  area  are  progressing  rapidly. 
Cleveland  belongs  to  the  future,  Cincinnati  to  the 
past,  as  far  as  metropolitan  economy  is  concerned, 
and  as  indications  point  at  present. 


Metro- 
politan 
units  and 
Federal 
Reserve 
districts 


Baltimore 
1790-1800 


Early 
1 9th 
century 

Cin- 
cinnati 


294    INTRODUCTION  TO  ECONOMIC  HISTORY 

It  would  be  worth  while  to  determine  statistically 
Criteria  what  a  metropolis  really  is.  If  satisfactory  figures 
of  ajul'y  were  available,  this  could  be  done.17  The  population 
oped  me-  of  the  metropolis  would  be  large,  as  compared  with 
tropohs  (.1^  population  of  other  cities  in  the  district.  This 
comparative  advantage,  however,  would  be  sugges- 
tive, not  final.  The  metropolis  would  have  a  rela- 
tively large  proportion  of  workers  engaged  in  whole- 
saling and  relatively  few  in  manufacture,  when  com- 
pared with  other  large  cities  in  the  district.  And 
there  would  be  a  lack  of  any  marked  dependence  on  a 
neighboring  center  for  trade  and  transportation.  A 
city  in  which  such  conditions  prevailed  would  at  least 
be  in  the  third  phase  of  its  development.  If  statis- 
tics proved  that  its  loans  to  the  surrounding  area  were 
large  (especially  its  discounts  of  commercial  paper), 
then  it  would  be  classed  as  a  fully  developed  (in 
function)  metropolitan  center.  Or  we  may  put  it 
this  way:  that  city  is  a  full-fledged  metropolis  when 
most  kinds  of  products  of  the  district  concentrate  in 
it  for  trade  as  well  as  transit;  when  these  products 
are  paid  for  by  wares  that  radiate  from  it;  and  when 
the  necessary  financial  transactions  involved  in  this 
exchange  are  provided  by  it. 

With  these  criteria  in  mind,  let  us  consider  Detroit 
Detroit  and  Pittsburgh.  The  population  of  each  of  these  cen- 
and  Pitts-  ters  nOf-  simply  in  the  narrow  municipal  limits  but  in 

burgh  .  .  ,  .... 

1920  tne  contiguous  territory,  is  more  than  one  million. 
But  as  compared  with  other  centers  in  the  district, 
Chicago  in  the  first  case  and  Philadelphia  in  the  sec- 
ond, they  are  not  so  large.  Although  both  were 
early  trading  and  military  posts,  they  have  developed 
the  manufacture,  not  the  distribution  of  goods.  The 
prominence  of  manufacturing  in  each  is  due  to  the 
phenomenal  development  of  one  industry,  automobile 


METROPOLITAN  ECONOMY— AMERICA          295 

in  Detroit  and  iron  and  steel  in  Pittsburgh.  Although 
the  capital,  surplus,  and  deposits  of  the  banks  in  both 
cities  are  large,  neither  can  claim  that  it  performs 
important  banking  functions  for  the  surrounding 
territory.18  Both  of  these  cities  must  be  classed  as 
industrial  tributaries  of  metropolitan  centers,  Detroit 
of  Chicago,  and  Pittsburgh  of  Philadelphia  and  New 
York  and  (to  an  increasing  extent)  of  Cleveland, 
though  they  are  both  fairly  independent  and  unwill- 
ing tributaries.  It  may  be  that  Detroit  and  Pitts- 
burgh will  ultimately  become  metropolitan  centers. 
Older  metropolitan  cities  have  entered  the  metro- 
politan stage  as  described  in  the  preceding  chap- 
ter, but  there  is  no  reason  why  in  new  countries, 
or  in  old  ones  at  a  late  date,  urban  centers  should 
not  enter  through  some  other  avenue,  in  the  case 
of  these  industrial  tributaries  through  manufac- 
turing. 

A  much  more  difficult  task  than  discovering  the 
metropolitan  centers,  is  outlining  their  areas.  This 
sometimes  proves  difficult  even  in  the  case  of  political  Bound- 

.  ,  .        .  ,.  .       aries  or 

states;  it  is  much  more  so  in  the  case  or  economic  metro- 
units.  Often  when  political  boundaries  are  decided 
upon,  they  are  maintained  as  purely  arbitrary  marks 
of  sovereignty.  Metropolitan  boundaries  cannot  thus 
be  made  hard  and  fast.  They  keep  shifting  with 
conditions,  and  the  land  on  the  confines  of  two  con- 
tiguous areas  is  debatable  territory.  For  one  purpose 
it  may  belong  to  one  metropolis,  for  a  different  pur- 
pose to  another.  The  reality  of  the  dependence  of 
the  area  decreases  as  you  go  out  from  the  metrop- 
olis :  that  is  the  essence  of  the  whole  matter. 

In  the  accompanying  map,  we  find  the  areas  of  the 
Federal  Reserve  districts,  as  somewhat  arbitrarily 
determined  by  an  official  commission.  Only  because  districts 


296    INTRODUCTION  TO  ECONOMIC  HISTORY 


METROPOLITAN  ECONOMY— AMERICA 


297 


it  is  suggestive,  is  it  included  here.  The  area,  popu- 
lation, and  banking  resources  of  these  districts  are 
of  great  interest,19  but  they  show  nothing  positive 
about  metropolitan  hinterlands. 

The  easiest  areas  to  determine  are  around  Boston 
and  the  Twin  Cities,  though  in  both  cases  there  is  a 
strip  of  debatable  territory.  The  hardest  to  mark  off 
are  the  hinterlands  of  New  York  and  Philadelphia; 
Cleveland  and  Cincinnati;  Chicago  and  St.  Louis; 
and  Kansas  City  and  San  Francisco.  The  limits  of 
the  last  two  are  hard  to  fix  because  of  the  undeveloped 
condition  of  parts  of  the  areas;  the  others  because  of 
overlapping.  In  the  case  of  St.  Louis  we  see  a  clear 
example  of  a  metropolis  turning  from  fields  once 
sought  after  to  sections  where  there  is  less  competi- 
tion, in  this  particular  instance  from  a  northern  to  a 
southern  district.  In  order  to  make  this  left-over 
territory  more  worth  while,  the  chamber  of  commerce 
of  St.  Louis  has  been  active  in  a  movement  for 
developing  town  trade  and  uplifting  rural  agriculture 
in  certain  parts  of  its  tributary  area. 

Philadelphia  is  only  two  hours  from  New  York. 
At  one  time  Philadelphia  was  the  unquestioned  center 
of  the  economic  life  of  Pennsylvania,  but  New  York 
has  so  tapped  the  northeastern  part  that  it  is  about  as 
much  in  New  York's  as  in  Philadelphia's  area.  And 
so  with  New  Jersey.  One  wonders  whether  the  future 
is  going  to  witness  a  revival  of  Philadelphia,  or  its 
submergence  into  the  position  of  an  industrial  satel- 
lite of  New  York.  For  those  who  wish  to  draw  the 
line  between  the  areas  of  the  two  metropolitan  cen- 
ters, the  most  profitable  suggestion  is  to  follow  the 
systems  of  transportation,  especially  where  they  run 
somewhat  parallel  and  then  veer  off  towards  one 
metropolis  or  the  other.  Go  to  some  of  the  towns 


1914 


American 
metro- 
politan 
districts 
and  their 
bound- 
aries 


Delimit- 
ing 

metro- 
politan 
districts 


298    INTRODUCTION  TO  ECONOMIC  HISTORY 


Peculiar- 
ities of 
metro- 
politan 
districts 


Metro- 
politan 
economy 
in  the 

South 


lying  midway  between  two  metropolitan  centers  and 
ask  which  is  the  more  dominating.  The  first  and 
unpremeditated  reply  favors  one  metropolis,  but  a 
second  thought  favors  the  other  and  so  you  are  left 
in  doubt. 

As  one  examines  the  metropolitan  districts  in  the 
United  States,  he  sees  decline  and  progress,  a  see-saw 
of  unending  struggle,  not  marked  by  political  elec- 
tions or  military  engagements,  but  by  advertising, 
the  circulation  of  newspapers,  the  activities  of  com- 
mercial travelers,  the  struggles  of  boards  of  trade, 
rate  wars,  and  the  migration  of  workers  and  business 
men.  The  observer  also  notes  that  where  there  is 
approximate  equality  of  function  there  are  inequali- 
ties of  resources  which  reflect  age,  natural  wealth  of 
the  area,  healthfulness  of  the  climate,  and  character 
of  the  people.  He  sees,  too,  that  some  metropolitan 
organizations,  while  well  rounded  in  their  economic 
activities,  are  nevertheless  distinguished  from  their 
neighbors  by  their  more  complete  development  of 
agriculture,  manufacture,  or  mining.  This  is  deter- 
mined in  the  long  run,  not  by  age  but  by  resources. 
The  Boston  area  has  but  little  agriculture,  almost 
no  mining,  but  a  great  deal  of  manufacture.  The 
Philadelphia  area  has  turned  from  agriculture  to 
mining  and  manufacture.  The  Chicago  area  keeps 
a  fine  balance  of  them  all. 

In  1852,  it  was  stated  that  there  were  "no  interior 
markets"  in  the  United  States.20  How  marketing 
conditions  have  changed  since  that  time,  for,  while 
perhaps  not  yet  shaken  down  into  final  form,  the 
West  is  nevertheless  well  developed,  except  for  the 
Rocky  Mountain  section!  But  the  South  is  different. 
Shall  we  say  that  on  the  whole  it  is  still  in  the  stage 
of  town  economv,  and  that  its  one  old-time  center  of 


METROPOLITAN  ECONOMY— AMERICA          299 

metropolitan  promise  (New  Orleans)  is  relatively 
declining?  New  centers  will  probably  arise:  Atlanta 
has  already  shown  powers  of  growth  and  commercial 
and  financial  organization.  During  the  Civil  War 
the  South  had  railroads  and  river  systems.  These 
met  or  crossed  one  another,  but  there  was  no  economic 
concentration,  except  at  New  Orleans,  and  that  was 
not  comparable  with  the  concentration  at  New  York, 
Boston,  and  Philadelphia.  The  South  during  the 
Civil  War  had  an  effective  military  organization 
but  a  feeble  economic  system.  With  but  few  towns, 
and  no  important  metropolis,  the  South  could  not 
mobilize  its  economic  in  support  of  its  military  forces. 

47.  DEVELOPMENT  AND  ORGANIZATION  OF  MET- 
ROPOLITAN ECONOMY  IN  THE  AMERICAN  NORTH- 
WEST.21 One  of  the  latest  metropolitan  develop- 
ments in  America  centers  in  the  Twin  Cities  (Minne-  Twin 
apolis  and  St.  Paul)  of  the  Northwest.  When  New  of^he 
York  was  competing  with  New  Orleans  in  the  West,  American 
and  Boston  and  Philadelphia  were  trying  to  hold 
their  own  against  their  great  rival  on  the  Hudson, 
St.  Paul  and  Minneapolis  were  not  only  unheard  of 
but  actually  not  yet  established.  Although  settlers 
made  claims  on  the  sites  of  each  at  about  the  same 
time,22  St.  Paul  grew  more  rapidly.  The  determining  1837-38 
factor  in  the  growth  of  St.  Paul  has  been  its  situation 
at  the  head  of  navigation  on  the  Mississippi  River, 
while  the  deciding  factor  in  Minneapolis'  develop- 
ment has  been  its  location  at  a  great  waterfall.  St. 
Paul  soon  became  primarily  a  commercial  center  and 
Minneapolis  largely  a  manufacturing  town.  Al- 
though the  heart  of  the  one  is  ten  miles  from  that 
of  the  other,  they  have  gradually  grown  together. 
Still  administratively  separate,  they  are,  and  long 
have  been,  a  single  economic  unit,  performing  the 


St.  Paul 
as  a  fur- 
trading 
post 

i849f. 


St.  Paul 
as  a  town 

After 
1857 


About 
iSjof. 

Minne- 
apolis as 
a  manu- 
facturing 
town 


one  great  function  of  concentrating  in  themselves  the 
economic  life  of  a  vast  area. 

For  a  short  time  a  mere  village,  St.  Paul  soon 
became  a  trading  post.  Furs  constituted  the  chief 
object  of  trade  from  a  very  early  time.  One  cannot 
help  comparing  this  place  with  the  early  Russian 
trading  posts  where  merchants  obtained  the  products 
not  of  the  field  but  of  the  forest,  chiefly  furs.  The 
great  artery  of  trade,  the  Mississippi,  runs  north  and 
south,  as  does  the  Dnieper.  At  its  mouth  is  New 
Orleans,  then  St.  Louis  farther  up,  and  finally  the 
Twin  Cities.  Beyond  to  the  north  lies  the  Red  River 
running  to  Hudson  Bay  past  what  is  now  Winnipeg, 
just  as  the  Russian  Duna  runs  northward  to  the  Baltic. 
Furs  and  other  wares  in  the  Middle  Ages  were  sent 
from  the  Baltic  up  the  Duna,  portaging  across  to  the 
Dnieper  then  down  to  the  Black  Sea  and  across  to 
Constantinople.  And  in  modern  times  goods  left  the 
Hudson  Bay  district,  especially  from  around  Winni- 
peg, for  conveyance  up  the  Red  River,  portaging 
across  to  the  Twin  Cities,  down  past  St.  Louis,  then 
to  New  Orleans,  and  through  the  Gulf  on  their  way 
to  London. 

But  soon  St.  Paul  was  to  become  a  trading  town 
rather  than  a  trading  post.  It  came  to  supply  con- 
sumers living  out  of  town,  and  then  even  the  retailers 
of  other  towns.  In  other  words,  it  developed  first 
a  retail  and  then  a  wholesale  trade,  receiving  the 
products  of  the  hunt  and  the  field  in  return  largely 
for  manufactured  goods  brought  up  the  Mississippi, 
and  in  due  time  for  wares  manufactured  in  St.  Paul 
itself. 

The  other  town,  Minneapolis,  almost  from  its 
origin  a  manufacturing  center  saw  its  first  commer- 
cial lumber  mill  built  in  1848,  and  next  year  its  first 


METROPOLITAN  ECONOMY— AMERICA          301 

grist  mill.  Later  a  merchant  mill  was  started  for 
the  manufacture  of  flour  for  sale  elsewhere.  St.  l854 
Louis  was  the  premier  center  for  flour  in  the  west,  »88* 
but  Minneapolis  early  surpassed  it  in  output.  Metal 
industries  (and  woolen  manufactures)  were  estab- 
lished, that  promise  much  for  the  future.  The  manu- 
facture of  lumber  was  the  first  to  be  undertaken  on  a 
large  scale  by  Minneapolis,  then  came  flour,  and 
finally  perhaps  metallic  wares,  each  reflecting  in  a 
general  way  the  development  of  the  resources  of  the 
district,  first  the  forest,  then  the  field,  then  the  mine. 

The  trade  in  grain  was  a  natural  concomitant  of  the 
manufacture  of  flour.    In  1879  Minneapolis  was  the  whole- 
ninth  market  for  wheat  in  America,  but  in  1885  the  ?aling 
first — a    position    it    still    holds.     It    developed    its  Twin 
general  wholesale  business  in  groceries,  dry  goods,   Cities 
and  hardware,  so  that  soon  it  was  as  much  a  commer-  About 
cial  center  as  St.  Paul.     But  while  St.  Paul  generally   l89<> 
looked  northward  and  southward,  Minneapolis  ordi- 
narily looked  to  the  west.     The  two  together  in  this 
way  organized  the  market  of  the  surrounding  district. 

In  early  days,  St.  Paul  was  an  outstanding  center 
for  the  fur  trade,  as  we  have  seen,  while  recently  it  Each  of 
has  become  noteworthy  as  a  live-stock  market.     In  *h.e.T%Tin 

,    .      .  ,    ,  .  .   .  ,  1-1        Cities  has 

1916  it  jumped  from  the  position  or  seventh  m  the  its  Spe- 
United  States  to  fifth,  where  it  has  remained  ever  cialti« 
since.    The  division  of  labor  between  the  two  cities, 
then,  is  not  only  as  to  areas  served,  a  division  that  is 
very  indistinct  now,  but  as  to  commodities  handled. 
While  St.  Paul  brings  in  live  stock,  dairy  products, 
and  furs,  nnd  sends  back  boots  and  shoes  and  milli- 
nery, Minneapolis  brings  in  grain,  flaxseed,  and  lum- 
ber, and  sends  back  flour,  groceries,  farm  implements, 
and  hardware. 

We  may  perhaps   say   that   during   the   first  two   ,850-70 


Phases  of  decades  of  their  active  existence,  the  Twin  Cities 
"oHtan  organized  a  general  marketing  system,  retail  and 
devel-  wholesale.  During  the  next  three  decades,  they  ex- 
perienced their  Industrial  Revolution.  Their  indus- 
1870-1900  trjaj  development  is,  of  course,  not  over  at  the  present 
time,  but  during  the  period  in  question  their  manu- 
factures came  to  occupy  a  large  number  of  the  people 
(though  as  yet  a  small  percentage  of  the  whole). 
Their  industries  were  improved  greatly  in  technique, 
notably  the  milling  industry;  they  sought  and  ob- 
tained wider  markets;  and  they  became  increasingly 
diversified.  Moreover,  it  was  during  this  same 
period  that  manufactures  developed  in  the  towns  of 
the  hinterland,  at  first  lumber  and  flour,  and  later 
boots  and  shoes,  woolens,  and  furniture.  There  has 
been  but  little  actual  movement  of  manufactures  from 
the  Twin  Cities  to  near-by  towns,  largely  because 
living  costs  and  factory  rental  are  still  very  low  in 
the  metropolis,  but  there  have  been  some  instances 
already.  Even  now  it  is  possible  to  pick  out  a  few 
towns  which  have  developed  manufactures  to  such  an 
extent  that  we  may  call  them  industrial  tributaries. 
Up  to  date  they  do  not  compare  with  the  industrial 
tributaries  to  be  found  in  the  hinterland  of  Boston, 
New  York,  Philadelphia,  Chicago,  or  Cleveland,  but 
they  have  gone  far  enough  to  indicate  their  probable 
future. 

While  in  older  districts,  for  instance,  in  England 
Trans-  and  the  Atlantic  states  of  America,  the  Industrial 
ponation  Revolution  preceded  the  revolution  in  transportation, 

phase  .  A  •  XT        i  i 

,  in   the   American  Northwest  these   two   movements 

1870-1900 

were  synchronous.  At  nrst  transportation  was  by 
river.  A  regular  packet  service  between  St.  Louis 
and  St.  Paul  was  established  in  1847,  but  occasional 
steamboats  had  come  into  the  district  since  a  very 


METROPOLITAN  ECONOMY— AMERICA          303 

early  date.  In  one  year  there  were  more  than  a  1858 
thousand  boat  arrivals  in  St.  Paul.  Both  Lake  Su- 
perior and  Lake  Michigan  were  accessible  by  high- 
way before  the  advent  of  the  railway.  It  is  the 
development  of  the  network  of  railways  centering  in 
the  Twin  Cities,  and  connecting  with  Chicago  and  the 
East,  St.  Louis,  Winnipeg,  and  Seattle,  that  brought 
about  the  revolution  in  transportation,  made  settle- 
ment more  general,  and  enabled  the  infant  towns  to 
take  up  such  manufactures  as  they  were  suited  for. 

The  first  railroad  to  approach  the  Twin  Cities  was 
from  Chicago,  the  "Rock  Island,"  reaching  the  Mis-   1854 
sissippi  far  to  the  south.     The  Cities  could  now  easily  Early 
reach  Chicago,  even  New  York  and  Boston,  by  a  com-  railroadi 
bination  of  boat  and  rail.     Milwaukee,  the  ambitious 
rival  of  Chicago,  was  also  racing  to  the  Mississippi. 
Local   railroads,    which    had   been   constructed    first 
between  the  Twin  Cities  themselves,  and  later  south- 
ward,   finally    connected    with    a    Milwaukee    road,   1867 
thereby  giving  to  the  Twin  Cities  an  all-rail  route 
to  the  Atlantic  seaboard.     This  was  the  realization 
of  a  generation  of  dreams  and  a  decade  of  plans. 
One  more  victory  for  New  York  and  its  aids  in  the 
West.     More  lines  were  built  till  finally  six  railroads 
linked  up  the  Twin  Cities  with  Chicago  and  the  East, 
and  two  others  provided  connections  by  way  of  north- 
ern routes.      Railroads  were   rapidly  built  to  Lake   1870 f. 
Superior,  thereby  providing  rail  and  water  transpor- 
tation to  New  York  and  Montreal. 

By   1875   steamboat  service  was  no  longer  vital, 
and   regular   trips   have    at   least   been    discontinued  Since  1918 
entirely.     Such  railroad  lines  as  had  been  opened  up 
changed  the  direction  of  trade  and  at  the  same  time  Later 
cheapened  transportation,  but  they  did  not  provide   ' 
the  Twin  Cities  with  the  network  of  railroads  neces- 


304    INTRODUCTION  TO  ECONOMIC  HISTORY 

sary  for  independent  metropolitan  existence.  That 
came  later.  Lines  were  constructed  in  all  directions, 
reaching  Winnipeg  to  the  north  in  1878,  and  the 
Pacific  with  one  road  in  1883  and  another  ten  years 
later.  The  rest  of  the  history  of  railroads  in  the 
district  has  to  do  with  construction  of  branch  lines, 
rate  wars  between  competing  railroads,  and  struggles 
between  rival  cities  for  advantages  in  rates  eastward. 
1879  It  is  true  that  two  railroads  were  constructed  to  con- 
1902  nect  witn  St.  Louis  but  they  have  not  developed  much 
inter-metropolitan  business.  The  Twin  Cities,  in  their 
endeavors  to  obtain  favorable  rates  eastward,  never 
forgot,  however,  nor  allowed  the  rate-making  author- 
ities to  forget,  that  they  had  a  choice  of  more  than 
a  dozen  different  routes  to  New  York,  one  set  of 
routes  southward  to  St.  Louis  and  New  Orleans  by 
water  or  rail,  a  second  group  all-rail  via  Chicago, 
and  a  third  group  of  either  rail  or  a  combination  of 
rail  and  water  by  way  of  the  Great  Lakes.  In  gen- 
eral, this  fact  has  had  great  weight  in  securing 
advantages  for  the  Twin  Cities. 

1870-1900       During  the  period  of  three  decades  in  which  the 
Northwest  experienced  such  great  changes  in  both 
transportation   and   manufacture,    there   grew  up   a 
Storage      system   of  storage   that   is  striking  to  the  eye   and 
Twin        stimulating  to  the  imagination.    In  the  earlier  period 
Cities        commodities  had  been  held  in  stores  till  sold,  and 
products  were  kept  in  barns,  bins,  and  flimsy  ware- 
houses of  limited  capacity.     But  as  the  great  mills 
developed,  lumber  was  stored  in  vast  quantities  in 
yards   covering   acres    of   ground,    and    grain    piled 
high,  thousands  of  bushels  on  other  thousands,  and 
linseed  and  linseed  oil  held  in  enormous  tanks.     All 
this  is  not  the  exception  but  the  rule.     One  of  the 
functions  of  the  metropolis  is  to  store  up,  to  suit  the 


METROPOLITAN  ECONOMY— AMERICA 


305 


convenience  of  consumer,  retailer,  wholesaler,  manu- 
facturer, or  transporter.  This  storing  may  be  done 
by  the  person  or  firm  concerned  with  using  or  dis- 
posing of  the  goods.  Or  it  may  be  done  by  specialized 
warehousemen,  those  who  store  the  goods  for  others. 
When  Minneapolis  was  only  or  chiefly  a  flour  center, 
the  storage  of  flour  was  of  the  first  class,  but  when  it 
became  a  grain  as  well  as  a  flour  city,  there  arose 
specialized  elevator  men.  To-day  elevators  are  owned 
not  only  by  flour  mills,  grain  merchants,  and  railroads, 
but  also  firms  storing  for  the  public  and  having  no 
interest  other  than  storing.  Thus  in  the  grain  trade 
we  often  find  the  following  functionaries,  the  farmer 
or  original  producer,  the  town  grain  elevator  that 
buys  the  grain,  the  railroad  that  transports  it  to  the 
metropolis,  the  public  elevator  that  stores  it,  the  grain 
commission  agent  that  sells  it  on  the  grain  exchange 
to  the  miller  who  grinds  it  and  sells  it  as  flour  to  a 
jobber  in  one  of  the  larger  towns  in  the  area,  who 
sells  it  to  the  retailer  in  a  near-by  town,  who  finally 
disposes  of  it  to  a  townsman  living  within  a  mile  of 
the  farm  on  which  the  grain  was  grown.  Each  of  these 
is  a  specialist,  the  public  elevator  man  being  merely 
a  late  addition.  And  these,  indeed,  are  not  the  only 
ones  concerned  in  the  business  of  providing  the  con- 
sumer with  flour,  for  there  are  the  banker,  trans- 
porter, telegrapher,  and  postman,  who  all  play  a  part. 
Gradually  to  meet  the  needs  of  trade,  transporta- 
tion, and  agriculture,  banks  were  established,  the 
farm  loan  business  begun,  and  a  commercial-paper 
house  opened  up.  Although  banks  in  the  Northwest 
kept  some  balances  in  the  banks  of  the  Twin  Cities, 
they  probably  kept  more  at  first  in  those  of  Chicago 
and  New  York.  Line  or  chain  banks,  which  have 
already  been  considered  in  the  preceding  chapter, 


About 
1881 


Estab- 
lish..-,1 
1881 


1853 
1874 
1895 

Financial 
growth 
of  the 
Twin 
Cities 


3o6    INTRODUCTION  TO  ECONOMIC  HISTORY 


About 


1889 

About 
1900 

The 
Twin 
Cities  as 
a  Federal 
Reserve 
center 

1914 


were  established  with  headquarters  commonly  in  the 
Twin  Cities.  One  firm  would  set  up  a  whole  line  of 
banks  somewhat  resembling  a  line  of  grain  elevators, 
one  in  every  important  town  reaching  out  to  the  con- 
fines of  the  district.  The  effect  of  this  is,  of  course, 
somewhat  like  that  of  the  branch  bank  system  in 
Britain.  Although  each  bank  is  separately  incorpo- 
rated and  has  a  separate  capital,  the  management  is 
centered  in  the  metropolis,  when  the  head  office  is 
located  there,  as  is  commonly  the  case.  Until  recently 
there  were  several  scores  of  banks  held  together  in 
such  chains.  Though  they  give  the  metropolis  added 
influence,  they  do  not  ordinarily  concentrate  capital 
in  the  Twin  Cities,  except  for  the  keeping  of  reserves 
there,  but  on  the  contrary  radiate  it  from  the  metrop- 
olis, or  at  times  from  the  older  and  more  prosperous 
parts  of  the  hinterland  to  the  newer  communities, 
especially  in  North  Dakota.  Occasionally,  it  is  true, 
when  a  chain  system  wants  to  have  specially  liquid 
assets  on  hand,  it  buys;  commercial  paper  in  the 
metropolis,  but  ordinarily  its  business  is  to  transfer 
the  cheaper  money  of  the  metropolis,  or  cheaper 
money  from  other  metropolitan  districts,  to  those 
sections  of  the  hinterland  where  interest  rates  are 
high.23 

It  was  not  for  some  years  after  Minneapolis  and 
St.  Paul  had  been  made  reserve  cities,  that  the  banks 
of  the  hinterland  actually  kept  very  large  reserves  in 
the  metropolitan  center.  It  will  be  recalled  that  the 
hinterland,  or  country,  banks  were  merely  permitted, 
not  required,  to  keep  their  reserves  against  deposits 
in  the  banks  located  in  reserve  cities.  But  when  the 
Federal  Reserve  system  was  set  up,  conditions  were 
changed.  Henceforth  the  hinterland  banks  were 
compelled  to  keep  part  of  their  reserves  in  the  Federal 


METROPOLITAN  ECONOMY— AMERICA 


307 


Reserve  Bank  located  in  the  Twin  Cities.  The  com- 
mercial paper  discounted  by  the  banks  located  as  well 
in  the  hinterland  as  in  the  metropolis,  could  be  redis- 
counted  in  the  Federal  Reserve  Bank.  In  short,  the 
Twin  Cities  are  now  a  well-developed  financial  center. 
It  is  true  that  in  the  autumn  they  may  have  to  borrow 
from  Chicago  or  New  York  to  help  dealers  buy 
the  grain  that  floods  the  market,  but  it  is  also  true 
that  at  other  times  they  have  a  surplus  to  loan  to  the 
eastern  cities.  In  other  words,  though  well  devel- 
oped, they  are  not  isolated,  for  no  financial  centers 
are  ever  cut  off  from  their  fellows:  in  fact,  the  ten- 
dency is  toward  greater  and  greater  financial  inter- 
dependence. 

The  metropolis  has  not  attained  a  position  of  great 
resources.  This  will  doubtless  come  with  the  develop- 
ment of  the  area.  But  all  the  metropolitan  functions 
are  performed.  There  is  even  a  small  Stock  Ex- 
change, never  very  active,  at  present  just  managing 
to  exist,  but  ready  to  spring  to  the  front  when  the 
time  comes.24 

The  metropolitan  area,  or  hinterland,  of  the  Twin 
Cities  is  shown  in  the  accompanying  map.  It  is  one 
of  the  largest  of  districts  and  smallest  of  populations 
in  the  United  States.  It  is  best  developed  nearest 
the  metropolis,  and  shades  off  into  primitive  agricul- 
ture, lumber  camps,  and  mining  ranges.  In  spite  of 
this  newness  and  rawness,  it  is  a  full-fledged  metropol- 
itan unit,  grown  up  partly  in  imitation  of  other  units, 
using  their  mechanism  and  traditions,  and  above  all 
the  mechanical  devices  of  transportation  that  make 
rapid  settlement  and  development  possible.  As  the 
geologist  looks  over  this  area,  he  divides  it  up  accord- 
ing to  prevailing  formations  and  soils.  The  political 
scientist  notes  that  it  consists  of  four  states  and  a  part 


The 
Twin 
Cities 
a  full- 
grown 
metro- 
politan 
center 

1909  f. 

Hinter- 
land of 
the  Twin 
Cities 


3o8     INTRODUCTION  TO  ECONOMIC  HISTORY 


METROPOLITAN  ECONOMY— AMERICA          309 

of  a  fifth.  But  the  economist  is  impressed  with  the 
essential  unity  of  the  whole  area.  The  heart  is  the 
metropolis.  Beyond  it  lie  the  tributary  towns,  and 
outside  of  them  the  vast  area  devoted  to  agriculture, 
cattle  raising,  lumbering,  and  mining.  The  economic 
life  is  focused  in  the  towns  and  these  in  turn  con- 
centrate it  in  the  metropolis.  The  counterpart  is,  of 
course,  the  radiation  outward  from  the  metropolis 
through  the  towns  to  the  whole  area. 

In  all  of  the  important  towns  there  are  both  trade 
and  manufacture.  But  some  of  these  towns  are  out-  Towns 
standing  commercial  centers,  while  others  are  essen-  t"tbhuetary 
tially  industrial.  A  few  of  them,  in  their  most  Twin 
enthusiastic  moments,  have  ambitions  of  rivaling  the  Cmes 
metropolis  itself.  Duluth  is  a  petty  principality  with 
a  few  mining  villages  to  the  north  and  an  agricultural 
district  to  the  west,  doing  a  nominal  homage  to  it. 
Mankato  calls  itself  the  metropolis  of  southern  Min- 
nesota; Grand  Forks  has  carved  out  for  its  territory 
a  large  slice  of  the  northern  part  of  North  Dakota; 
Fargo  takes  the  southern  part.  All  of  them  are 
minor  eddies  in  the  whirlpool  of  business,  just  as  the 
whole  area  is  but  one  metropolitan  unit  in  the  United 
States.  Each  one  also  has  some  financial  as  well  as 
commercial  importance.  Only  one  branch  of  the  Fed- 
eral Reserve  Bank  of  the  district,  however,  has  as 
yet  been  established — at  Helena.  Although  the  town 
of  Helena  is  not  advancing  so  rapidly  as  others 
near-by,  it  is  the  capital  of  the  state  (Montana) 
and  hence  of  some  financial  importance;  and  it  is 
conveniently  located  for  doing  the  banking  of  that 
part  of  the  Twin  City  area  most  remote  from  the 
metropolis.  One  great  advantage  in  a  branch  bank 
is  that  it  looks  after  the  peculiar  needs  of  the  imme- 
diate neighborhood,  in  this  case  mining.  And  it 


jro    INTRODUCTION  TO  ECONOMIC  HISTORY 

serves  the  further  purpose,  no  matter  how  slight,  of 
keeping  the  outpost  looking  to  the  metropolis,  rather 
than  to  any  other  center.  Remembering  that  the  San 
Francisco  area,  only  a  little  larger  and  more  populous 
than  that  of  the  Twin  Cities,  has  five  Federal  Reserve 
branches,  we  must  admit  that  the  metropolitan  unit 
in  the  Northwest  is  fairly  compact  and  well  centered 
in  the  Twin  Cities. 

And  yet  the  metropolitan  unit  is  not  a  perfect 
Excep-  formation.  Man's  creations,  like  nature's,  are  irreg- 
metro-  u^ar  anc^  admit  of  exceptions.  The  study  of  these 
politan  exceptions  only  demonstrates  the  rule.  They  may 
tration"  ^e  mentioned  not  because  they  are  peculiar  to  the 
Northwest  but  because  they  illustrate  the  kind  of 
exceptions  that  occur  generally  in  metropolitan  econ- 
omy. Although  towns  in  the  area  normally  send 
their  surplus  products  to  the  metropolis,  they  do  not 
send  them  all.  The  creameries  quite  near  the  metrop- 
olis send  all  their  output  usually  to  that  center,  but 
others  farther  away  ship  directly  to  distant  markets. 
Barren  (Wis.)  sends  its  surplus  to  Buffalo  (N.  Y.) ; 
Albert  Lea  (Minn.)  to  New  York  City.  The  granite 
cutters  of  St.  Cloud  (Minn.)  ship  tombstones  to 
every  state  in  America.  Duluth  sends  its  iron  ore 
directly  to  the  East  by  lake  steamers,  and  it  buys  and 
distributes  hardware  and  some  groceries  indepen- 
dently of  the  Twin  Cities.  Copper  mining  in  Mon- 
tana is  managed  from  Boston  and  New  York.  The 
bankers  of  the  Twin  Cities  have  been  so  busy  financ- 
ing lumber,  grain,  and  live  stock  that  they  have 
somewhat  neglected  mining.  Such  are  the  exceptions 
to  the  system  of  concentration. 

There  are  similar  exceptions  to  the  radiation  of 
goods  from  the  metropolis.  The  larger  stores  in  the 
towns  of  the  district  buy  women's  clothing  directly 


METROPOLITAN  ECONOMY— AMERICA 


from  New  York,  men's  directly  from  Chicago,  where 
the  styles  are  best  and  specialization  most  -marked. 
Shoes  are  frequently  bought  at  a  distance,  finer  shoes 
for  both  men  and  women  in  the  Boston  area,  women's 
shoes  in  Cincinnati,  men's  shoes  in  St.  Louis.  But  in 
the  smaller  stores  and  in  those  carrying  general  mer- 
chandise, everywhere  goods  are  purchased  from  the 
metropolis.  And  many  of  the  commercial  houses 
that  are  located  in  other  metropolitan  centers  have 
established  branches  in  the  Twin  Cities,  knowing  that, 
if  they  do  not  set  up  such  branches,  sooner  or  later 
rival  houses  will  start  up  there  and  take  their  trade, 
aided  by  the  advantage  of  lower  railroad  rates  and 
better  service. 

On  closer  examination  many  of  these  exceptions  are 
found  to  cover  only  part  of  the  business.  Firms  that 
boast  their  independence  of  the  metropolis  of  their 
district  in  the  marketing  of  wares  are  found  depen- 
dent upon  it  in  the  purchase  of  supplies  and  in  nego- 
tiating loans.  Somewhere  along  the  line  of  practi- 
cally every  concern's  business  there  is  an  element  of 
dependence  on  the  metropolis,  in  purchase  or  in  sale, 
in  trade  or  in  finance. 

Part  of  the  area  that  lies  as  tributary  to  the  Twin 
Cities  has  revolted,  like  tributaries  to  other  metro- 
politan centers.  The  Non-Partisan  League,  originat- 
ing in  North  Dakota  and  once  strong  throughout  the 
area,  and  indeed  somewhat  beyond  it,  has  challenged 
the  dominance  of  the  Twin  Cities.  The  grain  ele- 
vators of  the  Twin  Cities,  the  banks,  and  business 
men  generally  have  been  denounced  for  their  greed 
and  high-handed  methods.  Secure  in  their  monopoly 
of  certain  kinds  of  business,  they  doubtless  have  been 
greedy,  but  they  have  also  been  conservative  and  care- 
ful, and  some  of  the  criticism  is  due  to  this  fact. 


Excep- 
tions to 
metro- 
politan 
radiation 


Excep- 
tions not 
entirely 
excep- 
tional 


About 
1916 

Hinter- 
land in 
revolt 
<vs.  the 
Twin 
Cities 


3i2     INTRODUCTION  TO  ECONOMIC  HISTORY 

Fargo  more  than  any  other  town  is  perhaps  the  nest 
in  which  the  revolt  was  hatched.  And  it  is  note- 
worthy that  that  city  is  ambitious  to  become  commer- 
cially independent  of  the  Twin  Cities  and  even  to 
oust  them  from  part  of  their  present  tributary  area. 
1920 f.  The  Bank  of  North  Dakota  is  planned  in  part  to  bring 
about  emancipation  from  the  financial  dominance  of 
the  Twin  Cities.  A  big  packing  plant  has  been  built 
to  rival  St.  Paul's,  and  a  large  flour  mill  to  grind 
North  Dakota's  grain  otherwise  generally  sent  to 
Minneapolis  or  Duluth  has  been  begun. 

This  hostility  to  cities   that  possess  commercial 

Such          dominance  is,  of  course,  not  new.     The  governor  of 

nolnew     South  Carolina  complained  long  ago  of  New  York 

About        and  Philadelphia's  drawing  off  all  the  money.25     The 

1750          Grange  was  in  part  a  protest  against  the  position  of 

Chicago.     And  the  American  Revolution  was  in  its 

economic  aspects  a  protest  against  the  dominance  of 

London,  as  maintained  by  the  Navigation  Acts. 

In  emphasizing  the  concentration  in  the  metropolis 
Direct       and  radiation  from  it,  we  are  dealing  with  that  com- 
men°o"~      plicated  metropolitan  mechanism  that  demands  the 
politan       co-operation    of    many    specialized    traders.     This 
^exists    emphasis  is  proper,  because  such  indirect  trade  with 
in  the        its   many  middlemen   standing   in   between   original 
Ci7yD        producer  and  final  consumer  is  characteristic  of  the 
district      new  organization  and  indeed  has  led  to  the  protests 
mentioned  above.     Nevertheless,  there  is  still  a  good 
deal  of  non-metropolitan  trade — that  is,  in  goods  that 
do  not  enter  into  the  metropolitan  marketing  machin- 
ery.   Some  of  it  is  directly  between  consumer  and  pro- 
ducer, small  in  amount  but  not  negligible.    For  exam- 
ple,  occasionally  farmers   still  bring  some   of  their 
products  (such  as  potatoes)  to  the  towns  and  to  the 
metropolis,  delivering  to  the  very  door  of  the  con- 


METROPOLITAN  ECONOMY— AMERICA          313 

sumer.  And  as  pavements  are  being  built,  farmers' 
sons  and  daughters  sit  by  the  wayside  with  their  fruits 
and  vegetables  to  sell  to  the  passing  motorist.  And 
some  of  them  drive  a  thriving  trade.  Some  American 
towns  maintain  consumers'  markets,  but  there  are  few, 
if  any,  of  these  in  the  Northwest.  The  retailers' 
market  is  more  common,  a  place  where  producers  sell 
to  retailers,  either  shopkeepers  or  hucksters.  Such 
a  market  exists  in  Minneapolis,  but  it  is  not  large. 
Most  of  this  kind  of  trade  between  producer  and 
retailer  probably  occurs  in  the  small  towns  where 
the  farmer  still  takes  his  eggs,  fruit,  and  vegetables, 
for  sale  to  the  retailer  who  disposes  of  them  to  con- 
sumers in  the  same  town.  A  few  grist  mills  still  exist 
in  the  Northwest:  small  mills  grinding  the  grain  of 
the  farmer  and  giving  him  back  the  flour  or  meaL 
But  these  are  passing  away,  for  farmers  sell  nearly 
all  their  grain  for  grinding  in  merchant  mills  in  the 
Twin  Cities,  or  for  sale  through  Twin  City  grain  deal- 
ers. The  flour  they  buy  for  their  own  use  frequently 
comes  from  Twin  City  mills,  as  we  have  already  noted. 
But  more  and  more  the  farmers  are  buying  bread 
in  the  town,  generally  made  in  the  town  itself,  but 
sometimes  shipped  out  from  metropolitan  bakeries. 
This  restricted,  or  non-metropolitan,  trade  is  char- 
acteristic of  town  economy,  but  it  exists  within  the 
metropolitan  area  both  in  Europe  and  America.  It 
has  one  great  advantage:  perishables  can  quickly  pass 
from  producer  to  user,  and  If  for  no  other  reason,  will, 
or  at  least  should,  remain  as  a  valuable  supplement 
to  metropolitan  trade.  But  in  general,  the  tendency  f 
is  away  from  family  and  town  independence  in  trade,  the  Twin 
The  drift  clearly  is  towards  specialization.26  In  this  9.lt'r.  . 

•    n  •          i  J  district 

system  each  person  does  chiefly  one  thing,  he  produces 
for  a  market.     He  sells  a  few  commodities  and  buys 


3H    INTRODUCTION  TO  ECONOMIC  HISTORY 

the  rest.  The  farmer  in  the  Northwest,  when  near  a 
town,  sells  his  cream  and  buys  butter,  sells  his  grain 
and  buys  flour,  sells  his  wool  and  buys  cloth.  Though 
he  still  cans  his  own  fruit,  stores  away  his  own 
vegetables,  smokes  or  otherwise  preserves  his  own 
pork,  the  farmer  of  the  Northwest  is  very  much  a 
part  of  the  commercial  and  financial  machinery  of  the 
day.  Metropolitan  economy  is  not  an  organization 
for  merchants  and  bankers  but  for  all  within  the  unit. 
The  miner  and  the  farmer,  the  lumberjack  and  the 
rancher,  the  retailer  and  jobber,  the  wholesaler  and 
banker  are  all  functionaries  in  the  metropolitan  or- 
ganization. Their  own  special  businesses  are  a  part  of 
private  economy,  but  they  are  from  another  point  of 
view  mere  cogs  in  the  wheel  of  public  economy. 

48.       PRIVATE    AND    PUBLIC    ECONOMY.       Economy 

means  management  (or  relationship)  in  production, 
Private  not  unchanging  but  long-lived,  whether  fixed  by  law 
or  pledge  or  left  to  habit  and  interest.  Private  econ- 
omy is  the  relationship  of  individuals  within  a  unit  of 
production,  such  as  the  household,  the  farm,  the  fac- 
tory, the  store,  the  warehouse,  and  the  railroad.  For 
the  sake  of  efficiency  these  units  are  maintained.  With- 
in the  units,  especially  the  more  highly  organized,  there 
is  a  gradation  of  authority  and  a  division  of  labor. 

Public  economy,  on  the  other  hand,  is  the  relation- 
ship of  these   private  units,   which  makes  possible 
Public       co-operation  or  collaboration  in  production.     It  is 
economy     distinctly  exceptional  for  man  to  live   alone.     It  is 
not  only  unsocial  but  uneconomic.     Hermits   there 
have  been  perhaps  in  all  periods  of  history.     Because 
of  shame,  great  grief,  or  religious  fanaticism,  men 
have   withdrawn   from   their  fellows   to   live   alone. 
But  usually  people  plan  not  only  to  co-operate  with 
others  to  form  units  of  production  but  they  devise 


METROPOLITAN  ECONOMY— AMERICA         315 

ways  and  means  whereby  those  units  can  effectively 
co-operate  with  one  another  for  the  benefit  of  all  con- 
cerned. The  earliest  instance  of  this  was  collectional 
economy,  next  cultural  nomadic  economy,  then  village, 
town,  and  finally  metropolitan  economy.  All  of 
these  are  types  of  public  co-operation  that  have  been 
unconsciously  devised,  most  efficiently  to  serve  the 
material  interests  of  those  concerned.  In  the  pro- 
gression from  one  stage  to  another,  individuals  have 
overcome  natural  elements,  divorced  themselves  from 
famine  and  severe  want,  specialized  in  employments, 
and  become  more  and  more  dependent  upon  their  fel- 
lows for  material  existence.  Nature  has  been  bounti- 
ful, even  lavish,  but  not  everywhere  at  all  times.  By 
means  of  storing  from  season  to  season,  by  transport- 
ing from  place  to  place,  severe  wants  have  been  re- 
moved according  as  people  have  passed  from  collec- 
tional to  metropolitan  economy. 

Already  integration  in  production  has  made  some 
headway.    Packing  companies  own  and  operate  fruit  Integra- 
farms,    packing    or    canning   plants,    and   wholesale   tionin 

T-U     T  T   v    j  c  cl     i   r>  •  produc- 

nouses.     Ihe  United  States  Steel  Corporation  owns  tlon 

mines,  railroads,  steamships,  smelting  works,  and 
rolling  mills.  Yet  metropolitan  economy  stands. 
For  a  time  such  a  great  concern  as  the  United  States 
Steel  Corporation  may  give  Pittsburgh  on  the  one 
hand  and  Duluth  on  the  other  a  position  of  some  inde- 
pendence, may  in  fact  be  unmetropolitan  in  its  influ- 
ence. But  the  forces  of  economy  of  production 
(including  transportation)  will  in  all  probability 
change  the  situation.  The  same  company  has  bowed 
before  the  metropolitan  position  of  Chicago  and  1906 
established  works  at  Gary.  It  has  lately  erected  a 
plant  at  Duluth  which  in  time  will  probably  supply  1915 
the  Twin  Cities  with  cheap  raw  materials,27 


3i6    INTRODUCTION  TO  ECONOMIC  HISTORY 


Econ- 
omies of 
metro- 
politan 
trade 


Private 
economic 
units 
within 
the  public 
metro- 
politan 
organ- 
ization 


Duality 
of  eco- 
nomic and 
political 
organ- 
ization 


Parallel- 
ism of 
economic 
and  po- 
litical 
devel- 
opment 


Even  if  in  some  remote  period  nations  become 
socialistic,  the  people  owning  through  one  or  more 
agencies  all  the  units  of  production,  the  economies 
involved  in  metropolitan  trade  would  not  be  altered. 
The  concentration  of  the  exchange  of  goods  and  serv- 
ices in  large  centers  favorably  located,  and  the  cor- 
responding radiation  of  other  goods  and  services 
from  those  centers,  would  still  persist. 

The  farmer  of  the  American  Northwest  market- 
ing his  crops  through  the  Twin  Cities,  the  factory 
in  Worcester  (Mass.),  selling  its  goods  through  a 
Boston  agency,  both  constitute  a  private  economic 
unit  and  at  the  same  time  are  parts  of  a  metropolitan 
public  economic  organization.  The  private  exists 
within  the  public,  like  the  cells  within  the  organism, 
the  wheels  within  the  machine,  the  provinces  within 
the  political  state.28 

49.  ECONOMIC  AND  POLITICAL  ORGANIZATION. 
While  man  works  out  his  salvation  in  private  and 
public  economy,  he  still  finds  time  to  play  a  political 
part.  In  public  life  there  is  this  perennial  duality  of 
economics  and  politics,  often,  indeed,  two  sides  of  the 
same  coin.  The  individual  plays  his  role  in  metro- 
politan economy,  as  we  have  seen;  he  also  is  a 
citizen  of  some  national  or  imperial  state.  It  is  true 
that  some  races  are  stronger  in  one  field  of  activ- 
ity than  another.  This  is  illustrated  by  the  merry 
slander  that  the  Jews  own  New  York  but  the  Irish 
boss  it.  The  most  successful  people  obviously  are 
those  who  maintain  a  balance  between  economics  and 
politics. 

As  man  has  evolved  one  economic  organization 
after  another  through  the  five  stages  ending  in  metro- 
politan economy,  he  has  created  political  organiza- 
tions in  the  same  way  to  suit  his  varying  needs.  In 


METROPOLITAN  ECONOMY— AMERICA          317 

the    accompanying    table    we    find    synopsized    the 
changes  in  both  economic  and  political  life. 

ECONOMIC  AND  POLITICAL  DEVELOPMENT 

One   Type29  of  Economic  A  second  TyPe  of 

Political  fcconoi  Political 

Development  Development  Development 

1.  The  clan  i.  Collectional    econ-      i.  The  clan 

omy 

2.  Cultural    nomadic 

2.  The  tribe  economy  2.  The  tribe 

3.  Settled  village 

3.  The  "city"  state  economy  3.  The  territorial 

4.  Town  economy  state 

4.  The  empire  4-  The  national  state 

5.  Metropolitan  econ- 

omy 5.  The  imperial  state 

To  explain  this  table  fully  would  be  to  recount 
much  of  what  has  been  said  and  to  anticipate  some-  Causal 
thing  that  comes  later.  We  cannot  escape  noting  the 
interrelationship,  the  way  in  which  economic  changes 
prepare  for  political  changes,  and  the  way  the  new 
political  order  facilitates  the  incoming  of  a  new  eco- 
nomic organization.  Let  us  take  but  one  illustration 
of  this.  The  territorial  state,  such  as  France  and 
England  in  the  early  Middle  Ages,  was  a  territory 
held  together  dynastically  but  without  a  national 
feeling,  organized  to  wage  chiefly  defensive  wars. 
But  when  the  village  developed  into  a  town  and 
movable  property  was  greatly  increased,  then  the 
resources  of  the  state  became  large.  Taxes  could  be 
levied  and  goods  secured  for  waging  wars  or  con- 
ducting other  enterprises.  The  government  became 
strong  and  actually  led  the  people.  National  feeling 
was  born  under  such  circumstances.  And  then  within 
the  fold  of  the  national  state,  with  its  orderly  govern- 
ment, the  town  had  an  opportunity  to  grow  into  a 


3i8    INTRODUCTION  TO  ECONOMIC  HISTORY 

metropolis,  to  surround  itself  by  a  large  area  eco- 
nomically subordinate.  The  counterpart  of  the  en- 
largement of  the  area  at  home  was  the  development 
of  extended  trade  wherever  possible,  for,  as  we  have 
seen,  the  two  go  together.  The  influence  of  the  me- 
tropolis, in  other  words,  was  in  the  direction  of  an 
empire.  The  metropolis  cared  little  for  national 
lines:  it  took  out  of  the  state  as  much  as  it  wanted 
for  its  area  and  left  the  rest  to  develop  as  best  it 
might.  It  likewise  found  itself  compelled  to  expand 
abroad  for  raw  materials  and  food  and  for  customers 
for  its  own  products.  So  beset  have  historians  and 
economists  been  with  political  considerations  that 
they  have  not  discerned  the  economic  forces  working 
from  within,  inevitably  creating  political  situations 
and  as  inevitably  taking  advantage  of  them.  They 
have  not  generally  recognized  that  the  town  makes 
the  strong  nation  possible,  and  they  have  not  at  all 
observed  that  the  strong  nation  enables  the  metrop- 
olis to  grow,  and  that  metropolitan  forces  sooner  or 
later  lead  to  the  growth  of  empire.  In  their  obses- 
sion with  politics,  some  have  come  to  see  in  the  nation 
(or  the  state)  a  national  unit  of  production,  and  they 
have  spoken  of  national  economy  as  one  of  the  great 
stages  of  economic  development,30  following,  or  com- 
ing soon  after,  town  economy. 

National  economy,  in  this  case,  means  a  national 
National    organization  of  productive  agencies,  the  various  units 
economy     of  production  lying  within  the  nation  itself  (the  farm, 
organ-       the  factory,  the  steamship  line),  depending  upon  one 
ization       another  in  some  special  way.    According  to  this  con- 
duction     cept  there  is  a  national  division  of  labor,  a  national 
exchange  of  goods,  in  short,  a  national  market.    And 
some  have  found  a  nucleus  or  center  for  this  national 
market.     But  an  examination  of  this  theory,  in  the 


METROPOLITAN  ECONOMY— AMERICA          319 

light  of  the  information  already  presented,  shows 
that  it  will  not  stand.  The  national  center,  such  as 
London  in  England  and  New  York  in  America,  is 
losing  relatively  as  other  nuclei  grow  up,  or  as  we 
should  say,  as  other  metropolitan  marketing  systems 
arise.  Moreover,  trade  has  never  been  really  na- 
tional. The  boundaries  have  never  bound,  high  as 
the  tariff  walls  have  been  at  times.  More  and  more 
is  our  dependence  on  foreign  nations  becoming  a  fac- 
tor in  our  lives.  The  division  of  labor  is  not  national 
and  still  less  international.  It  is  rather  metropolitan, 
as  we  have  already  seen. 

And  yet  "national  economy"  is  a  phrase  which  we 
should  not  throw  over  entirely.  We  may  safely  use 
it  to  reflect  a  national  policy  rather  than  a  national 
economic  organization,  an  ambition  rather  than  a 
reality.  In  the  time  of  town  economy,  the  national 
economic  policy  was  largely  one  of  revenue.  Later 
the  nation  caught  up  with  the  town  in  its  thinking  National 
and  adopted  town  economic  policy,  applying  it  to  gg°30my 
itself  in  the  form  of  mercantilism,  as  we  have  already  national 
noted:  The  developing  metropolis  gradually  made  JUl^on 
itself  felt  in  the  councils  of  the  nation,  and  in  place  of 
mercantilism,  has  substituted  laissez-faire  or  liber- 
alism, not  entirely  but  in  large  part.  And  on  the 
horizon  some  see  the  darkening  cloud  of  Socialism, 
as  the  fourth  and  newest  national  policy.  It  may  be 
noted  in  passing,  that  each  policy  is  a  reaction  from 
the  preceding  one.  In  the  revenue  period  economic 
life  was  but  little  directed  or  turned  aside  by  national 
considerations.  In  the  mercantilistic  state,  careful 
guidance  was  the  rule.  Liberalism  is  somewhat  a 
return  to  the  revenue  policy;  and  Socialism  is  not 
unlike  mercantilism  from  the  standpoint  of  govern- 
mental interference  with  private  initiative.  To  each 


320    INTRODUCTION  TO  ECONOMIC  HISTORY 

of  the  four  policies  the  term  "national  economy"  may 

properly  be  applied. 

We  have  found  that  there  is  no  justification  for 
National  the  use  of  "national  economy"  as  an  actual  organiza- 
economy  tjon  Q£  busjness>  but  that  it  is  properly  applied  to 
national  various  national  ambitions  or  policies.  It  has  another 

traTivc9"  VGT^  Pr°Per  use>  as  a  national  administrative  organ- 
organ-  ization  of  economic  life.  For  more  than  a  thousand 
izanon  years  the  governments  of  England  and  France,  or 
what  roughly  corresponds  to  them,,  attempted  to 
serve  the  people  in  economic  and  other  affairs.  In  an 
indirect  way  the  state  was  of  some  assistance  in  busi- 
ness by  its  laws  of  weights  and  measures,  bread  and 
ale,  contract  and  trespass.  In  a  direct  way  it  has 
served  economic  life  by  providing  a  coinage  system, 
courts  of  justice,  and,  in  modern  times,  a  post  office. 
Possibly  such  assistance  is  to  go  much  farther.  The 
logical  development  of  it  looks  like  Socialism  in  whole 
or  more  likely  in  part.  All  the  utilities  above  men- 
tioned are  national,  in  so  far  as  the  expense  is  met 
by  the  national  unit  and  in  so  far  as  there  is  more 
or  less  uniformity  in  their  spread  over  the  nation. 
But  all  these  administrative  utilities  are  effective  only 
in  village,  town,  or  metropolitan  actual  service.  If 
these  same  utilities  were  provided  by  half  the  state, 
or  by  a  group  of  states,  such  as  the  Latin  League, 
or  by  a  world  state,  their  effectiveness  would  still 
depend  upon  the  public  economic  unit  in  existence. 
Regulation  or  administration  we  must  have,  but  pro- 
vided the  unit  is  big  enough  and  really  efficient,  it 
does  not  matter  much  what  other  attributes  it  may 
have.  There  was  for  a  long  time  a  tendency  toward 
a  national  unit.  Now  there  is  a  drift  toward  a  world 
unit,  though  it  is  likely  that  the  national  state  will 
long  continue  to  serve  the  prevailing  public  economic 


METROPOLITAN  ECONOMY— AMERICA          321 

unit,  whether  it  be  the  town  unit  in  China  or  the 
metropolitan  unit  in  England,  the  town  unit  in  the 
southern  part  of  the  United  States  or  the  metro- 
politan unit  farther  north. 

National    policies    and    political    administrations, 
reflect  many  sides  of  our  complicated  human  needs, 
of  which  the  economic  is  but  one,  though  the  most  Multi- 
fundamental.     Man  plays  as  well  as  works;  he  wor-  human 
ships  as  well  as  produces;  he  has  prejudices  against  activities 
other  nations  at  the  same  time  that  he  seeks  their 
trade.    He  is  willing  to  wage  a  war  for  dynastic  rea- 
sons, to  aggrandize  his  race,  to  extend  his  culture, 
and  to  enrich  himself  and  countrymen.    Political  and 
economic  organizations  develop  side  by  side,  distinct 
but  not  separate. 

Governmental  or  administrative  powers  have  been 
delegated  to  economic  units  and  may  be  again.  The 
collectional  and  cultural  nomadic  groups  seem  to  have 
had  such  governmental  authority  as  existed,  barring  adminis- 
pcrhaps  the  most  important  affairs  of  peace  or  war. 
The  village  group  was  not  only  a  productive  but  an 
administrative  unit,  the  unit  of  justice  and  often  of 
finance.  The  town  economy  group,  consisting  of  the 
town  and  the  surrounding  territory,  actually  coin- 
cided with  the  political  unit  in  the  ancient  world  and 
also  in  medieval  Italy.  In  the  territorial  states  of 
medieval  and  modern  Europe,  both  the  tribal  and 
later  the  feudal  institutions  tended  generally  to  keep 
the  towns  from  controlling  the  near-by  district.  The 
towns  themselves  were  administrative  units  within 
their  walls,  but  they  were  weak  indeed  without  do- 
minion over  the  districts  on  which  they  most  imme- 
diately depended.  And  yet  either  through  encroach- 
ment or  by  the  grants  of  the  sovereigns  themselves, 
some  towns  did  come  to  control  the  districts  round 


trative 
units 


322    INTRODUCTION  TO  ECONOMIC  HISTORY 

about,  as  in  Spain,  the  Netherlands,  and  parts  of 
Germany.  But  this  control  was  feeble  when  com- 
pared with  that  existing  in  contemporary  Italian 
towns.  The  point  at  issue  is,  of  course,  that  there 
is  a  strong  tendency  on  the  part  of  economic  units  to 
become  administrative  units  and  that  the  present 
Will  the  metropolitan  unit  (of  metropolis  and  hinterland) 
metro-  may  in  time  do  as  its  predecessors  did.  But  of  this 
unit*31  there  is  no  certainty,  and  indeed  weighty  arguments 
become  are  to  be  brought  against  it.  The  varying  size  of 
tradveT  the  metropolitan  area  would  at  present  create  diffi- 
culties in  making  it  an  administrative  unit.  And  it 
would  be  hard  in  some  cases  of  incomplete  develop- 
ment to  decide  on  the  most  likely  metropolitan  center, 
notably  in  the  southern  part  of  the  United  States, 
and  even  in  the  borderland  between  the  North  and 
the  South.  And  yet,  remembering  that  metropolitan 
economy  is  still  young,  and  believing  that  its  organ- 
ization and  area  may  be  some  day  further  crystallized, 
we  cannot  entirely  rule  out  the  apparently  remote 
contingency,  that  instead  of  the  almost  meaningless 
divisions  of  Michigan,  Indiana,  Illinois,  Wisconsin, 
and  Iowa,  we  shall  have  the  metropolitan  adminis- 
trative unit  of  Chicago.  On  the  other  hand,  history 
and  the  growth  of  tradition  help  to  make  provincial 
units  into  realities  of  prejudice  and  sentiment.  All 
this  brings  out  still  further  the  duality  of  our  public 
life,  its  political  and  its  economical  aspects  and  its 
slow  adjustment  of  cross  purposes  to  economic 
realities. 

Political  5O.       CULTURAL  ATTAINMENTS  UNDER  METROPOL- 

cuitural      !XAN  ECONOMY.     Various  institutions,  political,  eco- 

institu-  .  .        . 

tions  nomic,  and  ecclesiastical,  help  man  to  attain  greater 
cultural  heights.  The  national  school  systems,  the 
laws  of  the  state,  and  the  institutions  that  exist  in  the 


METROPOLITAN  ECONOMY— AMERICA 


323 


capital,  are  all  illustrations  of  political  help  and  guid- 
ance. The  city  of  Washington  is  America's  political 
capital  and  its  institutions  and  ideals  have  not  a 
little  influence  beyond  the  city  itself.  The  national 
Congress,  the  Pan-American  Union,  and  the  Smith- 
sonian Museum  are  among  the  most  important 
examples. 

Ecclesiastical  institutions  have  played  a  great  part 
in  man's  cultural  attainments.  Ancient  temples, 
medieval  and  modern  churches  have  taught  not  only 
spiritual  but  intellectual  and  aesthetic  lessons  that 
seem  to  us  indispensable.  Although  the  church  still 
maintains  schools,  universities,  and  hospitals,  it  is 
meeting  very  formidable  rivals  in  political  and  eco- 
nomic institutions. 

A  few  of  the  institutions,  which  we  may  call  "eco- 
nomic," are  survivals  of  town  economy,  notably  hos- 
pitals and  gilds,  both  performing  useful  services  in 
relieving  pain  and  educating  the  young.  The  insti- 
tutions that  have  arisen  under  metropolitan  economy, 
however,  are  by  long  odds  more  important  than  sur- 
vivals from  town  economy,  more  important  perhaps 
than  the  old-time  town  schools  and  academies  once 
so  fruitful  in  the  field  of  philosophy  and  letters  but 
now  resting  quietly  among  the  things  remembered 
but  not  seen. 

Because  of  the  fact  that  the  metropolis  normally 
contains  institutions  that  are  political,  or  ecclesias- 
tical, or  survivals  of  town  economy,  it  is  at  times 
difficult  to  isolate  those  that  arise  wholly  through 
metropolitan  economy.  And,  indeed,  it  is  to  be  ex- 
pected that  at  times  this  is  quite  impossible. 

The  metropolis  itself  has  a  large  and  increasing 
population.  As  men  have  come  in  from  the  hinter- 
land to  make  their  fortunes  in  the  metropolis,  they 


Ecclesi- 
astical 
cultural 
institu- 
tions 


Town 
economic 
institu- 
tions of 
culture 


The  me- 
tropolis 
contains 
all  three 
kinds  of 
institu- 
tions 


324    INTRODUCTION  TO  ECONOMIC  HISTORY 

Metro-       have  been  confronted  with  the  problem  of  housing. 
Fnsti™       They  have  met  it  in  the  obvious  way  of  overcrowd- 
tions  of      ing.    They  have  met  the  problem  of  getting  drinking 
sanitation  water  anj  of  disposing  of  sewage  by  overtaxing  the 
old  town  systems.     But  disease  soon  pointed  out  the 
futility  and  fatality  of  this  procedure.     Accordingly 
improved  methods   of   housing,   providing  drinking 
water,  and  disposing  of  sewage  have  been  devised, 
that  make  the  metropolis  a  more  healthful  place  than 
the  town  ever  was,  more  healthful  even  than  some 
country  districts.    And  this  influence  has  been  radiat- 
ing out  to  the  tributary  towns  and  to  the  villages 
and  scattered  homesteads. 

The  concentration  of  the  foodstuffs  of  a  wide  area, 
and  the  importations  from  other  districts,  have  en- 
Metro-       abled  the  people  of  the  metropolis  to  enjoy  a  mar- 
var?etn      ve^ous  variety  and  continuous  supply  of  fresh  fruit 
of  food-      and  vegetables.     The  hinterland  has  not  only  made 
this  possible,  but  in  making  it  possible  has  enabled 
the  metropolis  to  send  out  to  all  sections  such  garden 
stuff  and  fruits  (brought  in  from  a  distance)  as  were 
not  needed  by  the  metropolis  itself.    There  is  no  way 
of  measuring  the  effect  of  this  new  situation  upon 
health,  but  as  we  are  learning  more  about  the  anti- 
scorbutic properties  of  fresh  food  we  are  inclined  to 
give  it  great  weight. 

Because  of  the  number  of  sick  in  the  metropolis, 

and  the  fact  that  the  sick  of  the  hinterland  can  be 

Care  of      easily  carried  to  the  metropolis,  curative  institutions 

the  sick      have  been  established  in  and  quite  near  that  center, 

hospitals    and    special    clinics    that    can    thus    serve 

a  large  public.     And  so,  if  the  fresh  food  and  good 

water  do  not  fully  counteract  the  influence  of  dust 

and  soot,  the  citizen  of  the  metropolis  has  right  at 

his  door  a  good  place  to  cure  his  ills. 


METROPOLITAN  ECONOMY— AMERICA          325 

While  the  book  is  a  creation  of  the  town,  the  news- 
paper and  the  magazine  belong  to  the  metropolitan 
period.  The  really  worth-while  newspapers  are  journals 
usually  in  the  metropolis,  and  we  find  them  deterio- 
rating as  we  leave  that  center  for  the  more  remote 
parts  of  the  hinterland.  From  the  economic  stand- 
point these  newspapers  and  magazines,  dating  from 
the  i  yth  century,  and  gradually  in  the  I9th  century 
greatly  extending  their  circulation  within  their  own 
areas  of  influence,  have  furthered  the  trade  of  the 
metropolis,  especially  by  means  of  advertisements. 
But  they  have  from  the  cultural  standpoint  made  the 
metropolis  the  concentrating  and  radiating  center  for 
news.  Of  course,  some  metropolitan  cities  are  more 
noteworthy  than  others  in  this  respect.  While 
Boston,  New  York,  and  Chicago  rank  high,  Cleve- 
land, Kansas  City,  and  the  Twin  Cities,  are  of  no 
great  importance.  The  rivalry  between  New  York 
and  Chicago  to  be  news  centers,  and  even  literally 
news  centers,  is  very  real  and  somewhat  entertaining, 
but  so  far  the  honors  belong  to  the  city  on  the  Hudson. 

It  is  to  the  metropolis  that  people  look  for  fashions 
in  decoration,  manners  of  deportment,  new  songs,  new  Fashion* 
sayings,  and  new  amusements.  But  here  again  some 
centers  are  more  important  than  others,  though  that 
difference  is  probably  just  a  reflex  of  age  and  foreign 
influence.  Unfortunately,  these  changing  styles  and 
habits  can  hardly  be  put  down  as  one  of  the  highly 
cultural  attainments  of  metropolitan  economy.  Their 
chief  virtue  often  is  their  novelty. 

Artists  and  literary  men  commonly  go  to  the  me- 
tropolis, as  they  did  to  the  town  under  town  economy.   Art  and 

•*  f  «/»i*>r»r»» 

But  in  the  metropolis  they  find  a  wide  market  for 
their  creations,  that  emancipates  them  from  the  neces- 
sity of  having  to  depend  upon  patrons  as  they  did 


science 


326    INTRODUCTION  TO  ECONOMIC  HISTORY 

under  the  system  of  town  economy.  In  the  metrop- 
olis these  highly  talented  men  of  art  and  letters  can 
associate  in  even  more  specialized  groups  than  existed 
in  the  stage  of  town  economy.  In  the  metropolis 
there  are  enough  musicians  to  constitute  a  society, 
enough  literary  men  to  form  a  club,  and  enough  anti- 
quaries and  historians  to  form  separate  associations. 
Such  intense  specialization  in  arts  and  sciences,  which 
are  essentially  a  unit,  is  open  to  serious  objection  and 
yet  those  most  concerned  find  it  advantageous. 

In  formal  instruction  the  metropolis  has  no  mo- 
nopoly of  institutions,  though  it  may  have  the  greatest 
number    and    the     greatest    variety.     Universities, 
Educa-      established  in  towns  centuries   ago,   still  flourish  in 
tion  those  towns,  conscious  of  their  advantage  in  compara- 

tive seclusion.  It  is  only  in  the  metropolis,  however, 
where  you  can  find  the  combination  of  universities, 
technical  schools,  business  schools,  research  founda- 
tions, museums,  art  institutes,  and  great  libraries. 
It  is  this  variety  that  ministers  to  the  needs  of  stu- 
dents and  scholars  and  that  helps  the  metropolitan 
cultural  institutions  to  grow  so  rapidly.  The  most 
populous  metropolitan  university  is  located  in  New 
York.  Other  metropolitan  cities  are  not  very  far 
behind.  Yet  some  universities  located  in  minor  trib- 
utary towns  have  experienced  marked  growth. 
There  are  state  or  provincial  institutions  providing 
education  at  a  low  price.  They  well  illustrate  the 
influence  of  the  political  factor.  The  metropolitan 
and  the  state  universities  are  examples  of  the  dual 
forces  of  economics  and  politics. 

In  contemplating  the  culture  of  the  metropolis,  we 
find  it  easy  to  overlook  the  metropolitan  area  and 
even  the  larger  tributary  towns  and  cities.  Of  course 
such  omissions,  especially  of  the  larger  tributaries, 


METROPOLITAN  ECONOMY— AMERICA  327 

are  misleading.     In   America   both   Pittsburgh   and  Culture 
Detroit,   large   manufacturing  towns,   have   cultural  ^i™*^0" 
institutions  of  high  standing.     Pittsburgh  has  a  large  tribu- 
university,  a  flourishing  technical  school,  and  a  sym-  tanes 
phony  orchestra,  all  of  which,  except  the  large  uni- 
versity, can  be  matched  by  Detroit.     And,  of  course, 
both  have  newspapers   and  journals.     As   we   have 
already  seen,  these  cities,  though  chiefly  manufactur- 
ing, have  increased  both  in  population  and  wealth  to 
a   remarkable   degree.     It  would  be    hazardous   to 
say  that  Pittsburgh  has  fewer  institutions  of  higher 
culture  than  the  metropolis  Cleveland,  to  which  it  is 
more  and  more  subordinate.     But  generally  speak- 
ing, the  tributaries,  though  they  may  have  important 
institutions   of  science   and  art,   especially  technical 
schools,  do  not,  and  in  the  future  probably  will  not, 
compare  with  the  metropolitan  centers  for  variety  of 
higher  cultural  ideals  and  institutions. 

The  explanation  of  the  cultural  attainments  of  the 
metropolis  is  to  be  found  chiefly  in  the  great  wealth 
that  is  accumulated  at  the  center.    The  rich  metrop-   Culture 
olis  itself,  or  the  business  men  who  have  made  their   build"s 

,  .      .  .  ......  ..or  metro- 

rortunes  in  its  trade,  provide  the  institutions  usually  poiitan 
located  in  the  metropolis  itself.  Prominent  examples  economy 
of  private  benefactors  in  America  are  Perkins  and 
Higginson  in  Boston,  Girard  and  Drexel  in  Phila- 
delphia, Morgan  and  Rockefeller  in  New  York, 
McCormick  and  Crerar  in  Chicago,  and  Walker  and 
Carpenter  in  the  Twin  Cities.  Such  are  the  patrons 
of  art  and  science  (not  of  artists  and  scientists). 
These  are  the  princes  of  metropolitan  economy,  giv- 
ing of  their  wealth  to  the  purposes  of  higher  things. 
In  contemplating  their  personal  economic  gains,  we 
often  forget  their  cultural  benefactions.  Still  more 
perhaps  do  we  forget  that  some  of  the  actors  in  the 


328     INTRODUCTION  TO  ECONOMIC  HISTORY 


Died  1855 
Died  1871 


Born  1827 
Died  1919 


Born  1852 
Born  1850 


Quality 
of  metro- 
politan 
culture 


drama  of  metropolitan  economy  have  themselves 
made  contributions  to  intellectual  progress.  This 
may  well  be  illustrated  by  one  class,  the  bankers,  who 
perhaps  have  a  little  more  leisure  than  other  classes 
of  business  men.  And,  indeed,  one  would  not  need 
to  go  outside  of  the  bankers  of  London.  Three  gen- 
erations ago  Samuel  Rogers,  poet  and  friend  of  poets, 
and  George  Grote,  historian  of  Greece,  were  practi- 
cal bankers  in  London.  Somewhat  later  Palgrave 
combined  actual  banking  with  writing  on  the  subject 
and  editing  a  valuable  Dictionary  of  Political  Econ- 
omy. At  the  present  Dr.  Walter  Leaf  finds  time  to 
act  as  chairman  of  one  of  the  big  London  banks  and 
to  write  learned  books  on  the  Homeric  period  of 
Greek  literature  and  history.  And  Alfred  Hoare, 
a  partner  in  Hoares'  bank,  found  time  and  oppor- 
tunity to  compile  an  Italian-English  Dictionary,  the 
best  one  that  exists. 

It  is  easy  to  become  more  enthusiastic  about  the 
quantity  than  the  quality  of  the  culture  of  metropol- 
itan economy  as  compared  with  that  of  town  econ- 
omy. We  should  remember,  however,  that  it  took 
the  town  many  hundreds  of  years  to  reach  the  high- 
est in  quality.  Another  comforting  thought  is  that, 
in  spite  of  some  of  the  advantages  of  concentrating 
many  cultural  institutions  in  metropolitan  centers, 
there  may  come  about  a  process  of  decentralization 
such  as  took  place  in  industry,  a  movement  outward 
to  places  not  only  where  rents  are  lower  and  living 
generally  cheaper,  but  where  there  is  more  quiet  and 
repose.  Good  illustrations  of  this  are  found  in  the 
establishment  of  Cornell  University,  not  in  New  York 
City  but  in  Ithaca,  and  of  the  Mayo  Clinic  of  medi- 
cine and  surgery,  not  in  the  Twin  Cities  but  in  a  small 
town,  one  hundred  miles  away. 


METROPOLITAN  ECONOMY— AMERICA 


329 


The  metropolitan  period  has  witnessed  an  enor- 
mous increase  in  production,  partly  through  the  use 
of  machinery  and  power,  and  partly  through  harder 
work,  better  organization,  and  more  specialization. 
But  in  all  cases  this  economic  progress  has  been 
evolved  in  and  around  the  metropolis.  And  so  it  is 
with  the  higher  cultural  pursuits  that  have  gone  hand 
in  hand  with  the  economic  progress.  It  is  commonly 
and  probably  rightly  concluded  that  the  increase  in 
production  has  meant  a  somewhat  larger  share  in 
benefits,  material  and  non-material,  for  all  concerned, 
master  and  man,  capitalist  and  laborer.  If  this  be 
true,  then  we  should  regard  the  metropolis  as  a  true 
mother-city,  mother  of  wealth  and  culture,  generously 
bestowed  upon  substantially  all  her  children. 

51.     SUGGESTIONS  FOR  FURTHER  STUDY 

1.  Study  the  statistics   of   population   of   the  twenty-nine 
cities  called   by  the  census   "Metropolitan   Districts"    (Four- 
teenth Census  of  the  United  States,  Population,  Number  and 
Distribution    of    Inhabitants,    Summary     of    Results,    vol.    I 
(1921),  pp.  62-71).     Classify  the  cities  somewhat  as  follows: 
(a)  "metropolitan  centers"  in  the  sense  that  this  phrase  bears 
in  the  present  book,    (b)   cities  of  metropolitan  promise,  and 
(c)  industrial  and  commercial  tributaries. 

2.  Read  carefully  the  briefs  prepared  by  twenty  American 
cities  setting  forth  their  claims  as  commercial  centers,  printed 
in  Senate  Document  485,  63d  Congress,  2d  Session,  Location 
of  Reserve  Districts  in  the  United  States  (1914).     Note  par- 
ticularly the  maps. 

3.  See  the   Report   of   the  Industrial   Commission   on   the 
Distribution  of  Farm  Products,  vol.  VI  of  the  Commission's 
Report  (1901). 

4.  Study  the  Report  of  the  Federal  Trade  Commission  on 
the  Meat  Packing  Industry,  Summary  and  pt.  I   (1919),  and 
pt.  IV  (1920) 


Metro- 
politan 
economy 
causes 
both  eco- 
nomic and 
cultural 
advance 


330    INTRODUCTION  TO  ECONOMIC  HISTORY 

5.  Study  the  Report  of  the  Federal  Trade  Commission  on 
the   Grain    Trade,   vol.    II.     Terminal    Grain    Markets   and 
Exchanges   ( 1 920 ) . 

6.  See    The   Marketing    of   Farm    Products    (1916),    by 
L.  D.   H.  Weld,   especially  chaps.   II,  V-VIII,   XI,   XIII, 
XVIII-XX. 

7.  See  Marketing,  its  Problems  and  Methods   (1921),  by 
C.  S.  Duncan,  especially  chaps.  III-VIII. 

8.  In  1854  both  Cincinnati  and  New  Orleans  were  called 
"queens"  over  wide  areas.     Which  cities  were  their  rivals  at 
that  time? 

9.  In  the  twenty-year  period  of  1853-1872,  railroads  were 
especially  anxious  to  get  across  the  Mississippi  River.     Two 
rival    metropolitan    cities    took    opposite    sides,    one    favoring 
bridges,  the  other  opposing  them.    Which  were  they  and  what 
were  their  reasons? 

10.  The  business  men   of  New  York,    Philadelphia,   and 
Baltimore   sought   a  central   railroad   to   the   Pacific    (Union 
Pacific),  those  of  New  Orleans  a  southern  route   (Southern 
Pacific),    and  those  of   Boston   a  northern    route    (Northern 
Pacific).     In  what  order  were  these  railroads  actually  com- 
pleted?    Why   should    Boston   be   interested   in   a   line   from 
Duluth  and  the  Twin  Cities  to  Portland   (Oregon)  ? 

11.  What  stand  has  New  York  taken  on  the  question  of 
the   exemption    of   American   ships    from   tolls   when    passing 
through  the  Panama  Canal  ?     What  have  the  newspapers  of 
the  inland  metropolitan  centers  said  about  this?     Whence  the 
conflict  of  interests?     What  will  settle  the  matter?     Compare 
with  this  the  attitude  of  New  York  to  the  new  plan  to  con- 
struct a  Great  Lakes  and   St.   Lawrence  transportation   and 
power  system. 

12.  In   what   cities   have   great   International    Exhibitions 
been  held  since  the  first  one  in  London,  1851?     Consult  the 
article  "Exhibition"  in  the  Encyclopedia  Britannica  (nth  ed.). 
Can  you  classify  them  as   (a)   economic  metropolitan  centers, 
(b)  political  metropolitan  centers,  and   (c)  cities  ambitious  of 
becoming  economic  metropolitan  centers? 


METROPOLITAN  ECONOMY— AMERICA          331 

13.  Some  might  regard  New  York  as  a  super-metropolis 
On  what  is  this  position  of  eminence  based  ? 

14.  The  Federal  Reserve  System  of   1914  was  aimed  di- 
rectly at  the  dominance  of  New  York  in  banking,  and  at  Wall 
Street's  too  ready  use  of  the  country's  reserves  piled  up  in  New 
York.     Would  the  decentralization  have  come  about  in  time 
even  without  a  new  law?    Had  it  not  in  fact  begun,  1909-13? 
See  the  Pujo  Committee  Report,  the  Congressional  debates, 
the  Federal  Reserve  Act,   and  journals  of  the  day,   such  as 
Banking  Reform,  1912-13. 

15.  In   the   light   of   metropolitan   economic   development, 
what  inquiries  should  the  U.  S.  Census  Bureau  make? 

16.  When   you   recall   that   the  metropolitan   chamber   of 
commerce    (e.    g.    St.  Louis,    Mo.)    to-day    sends    agents    to 
organize  chambers  in  small  towns  with  the  idea  that  these  new 
bodies   will    help    townsmen    and    countrymen    increase    their 
earning  power  and  their  spending  propensity,  would  you  say 
that   metropolitan   development   is   still   entirely   unconscious? 
The  greater  expenditure  and  greater  earning  are  made  possible 
by  trading  with   the   metropolis.      Did    St.    Louis   make   this 
inference  advisedly?     Can   you  find   other  examples  of  con- 
scious development? 

17.  Trace  the  phases  of  metropolitan  development  through 
which  Boston,  New  York,  Philadelphia,  or  Chicago,  has  passed. 
What  variations  do  you  find  when  you  compare  the  resulting 
phases  with  those  of  London?     To  answer  this  question  con- 
siderable research  is  obviously  required. 

1 8.  How  is  it  that  we  can  call   New  York  the  greatest 
marketing  nucleus  in  America,  the  greatest  manufacturing  city, 
the  greatest   transportation   depot,    and   the   greatest   financial 
center,  and  still  speak  of  the  financial  phase  of  New  York's 
development?     Does  the  development  of  one  phase  of  metro- 
politan economy  mean  that  there  is  any  absolute  diminution  in 
the  activities  identified  with  earlier  phases? 

19.  Is  it  true  to  say  that  in  the  older  countries  metropolitan 
economic  development  was  unplanned,  but  in  the  newer  lands 
there  is  a  considerable  element  of  imitation? 

20.  The  economist  may  be  inclined  to  regard  metropolitan 


332     INTRODUCTION  TO  ECONOMIC  HISTORY 

economy  as  a  matter  of  market  organization.  Would  you 
expect  to  find  that  the  marketing  area  for  grain  in  the  Ameri- 
can Northwest,  centering  in  the  Twin  Cities,  exactly  coincides 
with  the  area  for  cattle,  for  wholesaling  hardware  and 
groceries  ? 

21.  There  are  at  least  three  views  as  to  the  best  basis  of 
market  studies :    (a)  area  or  population;    (b)  commodities;  and 
(c)  business  units  or  firms  (such  as  the  Ford  Motor  Co.,  and 
the  U.  S.  Steel  Corporation).     Consider  the  respective  claims 
of  each  with  illustrations  of  their  application  to  metropolitan 
economy. 

22.  Can  you  find  a  purely  local  trade  within  your  metro- 
politan   district,    one   analogous   to   that   of   town    economy? 
And  yet,  can  you  not  almost  always  find  in  the  purchase  of 
raw  materials  or  of  machinery,  some  metropolitan  connection? 

23.  Is  it  true  that  metropolitan  commercial  paper  is  the 
most   liquid   to   be   found?      Consider   the   commercial   paper 
handled  by  banks  in  the  smallest  towns,  larger  towns,  and 
great  industrial  satellites. 

24.  Is    it    true   that   the   metropolitan    centers   ordinarily 
attract  the  best  business  men?     Is  the  hinterland — farm  and 
town — a  good  preparation  for  metropolitan  business  with  its 
breadth  of  outlook  and  numerous  complexities?    Why  is  it  said 
that  a  country  bank  offers  better  apprenticeship  than  a  metro- 
politan bank? 

25.  Study  the  publications  of  the  chamber  of  commerce  or 
the  commercial  club  of  the  metropolis  of  your  district.     What 
special    committees    and    officials   does    this    association    have? 
What  problem  does  it  put  uppermost?     Has  it  maps  of  its 
hinterland?    Has    it    prepared   campaigns   of    advertising   and 
education  to  cement  its  hold  on  the  hinterland  ? 

26.  Make  a  list  of  various  metropolitan  centers  in  America 
and  elsewhere,  indicating  their  specialties.     On  what  does  this 
specialization  depend?    Is  the  factor  diminishing  or  increasing? 
What  would  be  the  effect  of  either  development  on  inter-metro- 
politan trade? 

27.  Study  your  metropolitan  area  so  as  to  be  able  to  judge 
of  its  economic  future.     Is  it  the  same  as  its  neighbors?     Has 


METROPOLITAN  ECONOMY— AMERICA          333 

it   coal,   iron,   copper,   cement,  lumber,   potash,   cotton,    flax, 
wheat,  cattle,  and  fish? 

28.  Why  is  Denver  not  a  metropolitan  center?    What  fac- 
tors determine  its  future?     On  what  neighboring  cities  does  it 
depend  for  the  most  part? 

29.  How  would  you  draw  the  line  delimiting  one  metro- 
politan economic  unit  from  another?     Will  the  development 
of  the  concrete  highway,  the  radio,  and  the  airplane  change 
the  area?    Draw  a  map  of  your  own  metropolitan  organization. 

30.  Make  a  map  of  the  hinterland  of  some  metropolitan 
unit  in  America,  showing  (a)  cities  having  metropolitan  prom- 
ise,  (b)   mere  manufacturing  satellites,  and  (c)   the  consider- 
able commercial  satellites. 

31.  Is  the  tendency   toward   larger   metropolitan  centers 
and  smaller  metropolitan  hinterlands?    If  so,  what  will  be  the 
effect  upon  the  number  of  metropolitan  units  in  the  United 
States?     Which  cities  will  have  a  chance  to  become  metro- 
politan   centers?      Consider    Seattle,    Los    Angeles,    Denver, 
Omaha,  Dallas,  Galveston,  Birmingham,  Duluth,  Indianapolis, 
Detroit,  Buffalo,  Pittsburgh,  and  Providence. 

32.  Why  is  the  metropolitan  center  a  great  labor  market? 
Study  the  work  of  employment  agencies,  public  and  private, 
in  the  metropolis  of  your  district.     Locate  the  chief  street  or 
section — near  the  station  is  it  not? 

33.  A  large  wholesale  hardware  company  in  St.  Louis  tried 
to  centralize   all   its  business  in   St.   Louis  but  gave  up  the 
attempt  (in  favor  of  widely  located  branches),  for  the  follow- 
ing reasons:    (a)    loss  in   freight  on   goods  bought   from  the 
manufacturer,  e.  g.  in  New  England,  goods  that  in  marketing 
often  had  to  be  sent  back  over  at  least  part  of  the  route  over 
which  they  had  come;  (b)  loss  in  freight  on  goods  shipped  long 
distances  from  St.  Louis  to  the  retailers;  and  (c)  inability  to 
give  "service"  to  retailers  from  St.  Louis — that  is,   frequent 
shipments  of  small  lots  of  goods,  to  save  retailers  from  tying 
up  capital   in   a   large  stock.      Study  the  decentralization   of 
other  businesses. 

34.  What  is  the  significance  of  "Pittsburgh  plus"  in  do- 
mestic freight  rates  in  America.     How  does  it   affect   Pitts- 


334    INTRODUCTION  TO  ECONOMIC  HISTORY 

burgh,  Birmingham  (Ala.),  Chicago,  Milwaukee,  Duluth,  the 
West  generally?  Compare  the  influence  of  the  tariff  on 
national  comparative  costs  with  that  of  "Pittsburgh  plus"  on 
local  comparative  costs.  What  would  be  the  effect  of  the  aboli- 
tion of  "Pittsburgh  plus"  on  the  various  metropolitan  districts? 

35.  Two  alternative  emphases  have  been  put  on  foreign 
trade,  national  self-sufficiency  and  international  interdependence. 
Is  a  similar  emphasis  applicable  to  metropolitan  economy?    St. 
Louis  has  been  urging  the  farmers  in  its  area  to  grow  their 
own  wheat  and  raise  their  own  hogs.     What  is  the  probable 
(and  legitimate)  motive  of  St.  Louis  in  this  attitude? 

36.  Let  us  assume  that  all  America  has  reached  the  fourth 
phase  of  metropolitan  economy,  and  that  each  metropolitan  unit 
has  a  congress  or  legislature.    Which  would  be  in  a  position  to 
enact  the  more  satisfactory  economic   legislation,   the  metro- 
politan legislature  or  the  state  legislature?     What  would  be 
the  chief  difficulties  in  the  way  of  establishing  and  maintaining 
such  legislative  metropolitan  units?     Would  the  attempt  be 
really  worth  while? 

37.  Consider  the  various  meanings  of  national  economy: 
(a)    national    economic    administration,    (b)    state   economic 
policy,    (c)    actual  production  based   on  a  division  of  labor, 
and   (d)   the  study  of  economics,  the  Volkswirtschaftslehre  of 
the  Germans,  or  the  political  economy  of  a  generation  ago. 

38.  Draw  up  clear  statements  of  the  meaning  of  national 
economy,  world  economy,  and  metropolitan  economy — that  is, 
conceptions  that  appeal  to  you  as  the  most  significant. 

39.  Develop  at  length  the  connection  between  national  econ- 
omy on  the  one  hand  and  on  the  other  hand  (a)  village,   (b) 
town,  and   (c)  metropolitan,  economy. 

40.  Make  a  list  of  the  different  businesses  that  are  called 
"national":    five-and-ten  cent  stores;  Simmons  Hardware  Co. 
of    St.    Louis;    Butler    Bros.,    wholesalers    of    dry    goods,    of 
Chicago;  the  big  packers;  the  Watkins  Medical  Co.;  the  Ford 
Motor  Car  Co. ;  the  United  Drug  Co. ;  the  International  Har- 
vester Co. ;  and  the  big  mail-order  houses.     Do  you  not  find  that 
the  spread  of  these  concerns  is  very  unequal  in  different  parts 
of  America,  that  many  of  them  sell  abroad  as  well  as  at  home 


METROPOLITAN  ECONOMY— AMERICA          335 

and  that  in  all  cases  they  illustrate  very  clearly  the  working 
of  metropolitan  economy  either  in  buying  or  selling,  in  the 
actual  exchange  of  certain  goods  or  in  the  financial  transactions 
involved  ? 

41.  Treasure  your  exceptions,   for  if  you  find  enough  of 
them  you  may  overturn  the  rule.     So,  study  the  instances  that 
illustrate  national  economy,   and  those  that  illustrate  metro- 
politan  economy,   and   then  decide  which  is  the  more  valid 
concept. 

42.  The  historian  thinks  of  periods  of  time,  the  historical 
(or  genetic)  economist  of  stages  of  development,  and  the  eco- 
nomic theorist  of  types.     Illustrate  all  three  points  of  view 
from  a  study  of  metropolitan  economy  in  America. 

43.  How  has  the   representation   of  small   local   units  in 
legislative  assemblies  (Federal  and  state)  affected  metropolitan 
economy?     Consider,  for  example,  the  laws  against  trading  in 
futures.     Determine  from  the  Official  Congressional  Directory 
how  many  congressmen  from  your  state  come  from,  or  have 
lived  a  long  time  in,  small  towns  or  country  districts,  remote 
from  metropolitan  centers. 

44.  What  influences  have  been   at  work   magnifying  the 
political  and  minimizing  the  economic?     Consider  the  propa- 
ganda carried  on  by  sovereigns  long  ago  in  favor  of  a  strong 
government,  the  study  of  Roman  law,  the  appeal  of  national 
military  events  to  the  imagination  and  their  enthronement  in 
literature,  etc. 

45.  Consider  the  possibilities  of  an  international  organiza- 
tion with  British  imperial  organization  as  the  political  basis,  and 
American  Federal  Reserve  organization  as  the  economic  basis. 
This  is,  of  course,  pure  speculation  but  very  similar  to  much 
that  has  been  seriously  indulged  in  lately. 

46.  What  evidence  do  you  find  for  the  belief  that  politics 
is  largely  a  camouflage  for  economics?     Consider  local  or  sec- 
tional conflicts  in  the  United  States,  and  class  conflicts  both 
in  Europe  and  America. 

47.  What  is  the  value  of  the  division  of  trade  into  inside 
and  outside  commerce — that  is,  trade  within  the  group    (vil- 
lage, town,  or  metropolitan)    and  trade  between  the  groups? 


336    INTRODUCTION  TO  ECONOMIC  HISTORY 

What  light  does  this  throw  on  the  so-called  world-economy  or 
world-market  ? 

48.  What  illustrations  are  to  be  found  of  popular  fear  of 
metropolitan  institutions?     Are  these  examples,  London  com- 
mercial companies,  such  as  the  East  India  Company;  the  First 
U.  S.  Bank    (1811);  the  Second  U.  S.  Bank   (1836);  and 
Wall  Street  (1907-1914)  ?    Add  to  these  from  the  history  of 
the  West. 

49.  Study    Wallace    Rice's    remarkable   ode    to    Chicago, 
printed  in  part  below.     Do  you  accept  the  picture?    Compare 
similar  enthusiasms  for  villages  and  towns.     Are  they  usually 
written  before  or  after  the  heyday  of  the  institution  described? 

Mother,  Mother  and  Queen,  beautiful,  strong,  and  alert, 
Rich  in  motherhood's  riches,  in  diligent  children  and  wise, 

Clad  as  the  mighty  are  clad,  with  azure  and  sable  engirt, 
Wonder  of  waters  about  you,  and  swirling  of  toil-laden  skies, 

Beautiful  are  you  with  labor,  that  children  of  men  may  be  blest, 
Lovely  as  mothers  are  lovely  in  youth  with  a  child  at  the 
breast, 

Comely  with  duties  fulfilled  and  glorious  justice  beyond, 
Mystic  and  wistful  with  dreams,  noble  ideals  and  fond ! 

Royal  your  rule  and  secure  over  a  broadening  realm, 
Workshop  and  coffer  and  mart,  palace  and  play-ground  and 

street, 

Circled  by  ocean-like  prairies  that  suns  of  summer  o'envhelm 
League  upon  league  with  harvests  waving  and  golden  and 
sweet. 

50.  Classify  the  cultural  institutions  of  some  metropolitan 
district  according  to  the  support  that  they  receive,  or  according 
to   the   agency   that   originated    them,    somewhat   as   follows: 
ecclesiastical,  political,  economic   (town,  metropolitan),  social. 

51.  Does  a  study  of  the  five  stages  outlined  in  this  book 
throw  any   light  on   the   economic   interpretation  of   history? 
Does  a  recognition  of  ecclesiastical  and  political  influences  in 
any  way  invalidate  the  economic  interpretation  theory? 


METROPOLITAN  ECONOMY— AMERICA          337 

For  further  references  see  the  notes  below. 
52.     NOTES  TO  CHAPTER  VI 

1.  See  the  Commercial  and  Financial  Chronicle  (Aug.  21, 

1875),  P.  171- 

2.  See  the  statistics  of  exports  and  imports  in  the  annual 
reports  on  the  Foreign  Commerce  and  Navigation  of  the  United 
States. 

3.  E.   L.   Bogart  and   Thompson.      The  Industrial  State, 
1870-1893,   in    The   Centennial   History    of  Illinois,   vol.   IV 
(1920),  pp.  376-377. 

4.  See  the  Commercial  and  Financial  Chronicle  (Sept.  22, 
1888),  p.  339- 

5.  This  does  not,  of  course,  preclude  rivalry  between  St. 
Louis  and  Kansas  City,  which  is  very  real  at  the  present  day. 
Some  people  think  that  this  rivalry  has  already  been  settled  in 
favor  of  Kansas  City  and  against  St.  Louis. 

6.  Boston  Board  of  Trade,  Fourth  Annual  Report  (1858), 
P.  85. 

7.  Cf.  T.  Dwight,  Travels  in  New  England  and  New  York 
(1821),  vol.  I,  p.  522. 

8.  See  Nathan  Hale  in  the  Boston  Almanac  for  the  Year 
1840,  p.  87. 

9.  Twenty-fourth  Annual  Report  of  the  Trade  and  Com- 
merce of  Chicago    (1882),  p.   121.     See  also  the  Commercial 
and  Financial  Chronicle  (May  7,  1892),  pp.  744-745. 

10.  Commercial    and    Financial    Chronicle     (March     2O, 
1886),  pp.  354-355- 

11.  Location    of   Reserve  Districts   in    the    United   States. 
Senate  Document  485,  63d  Congress,  2d  Session  (1914),  p.  349. 

12.  R.  Parkinson,  A  Tour  in  America  in  1798,  1799,  and 
1800  (1805),  vol.  I,  pp.  78-79. 

13.  See  H.  R.  Meyer,  Government  Regulation  of  Railway 
Rates  (1905),  pp.  220  f. 

14.  See  the  Commercial  and  Financial  Chronicle   (Sept.  I, 
1888),  pp.  243-245;  (Sept.  7,  1889),  PP-  286-288;  and  (Nov. 
2,  1912),  pp.  1154-1155. 


338    INTRODUCTION  TO  ECONOMIC  HISTORY 

15.  Based  on  statistics  of  bank  debits  to  individual  accounts, 
as  published  in  the  Federal  Reserve  Bulletin. 

1 6.  The  choice  of  Richmond,  Dallas,  and  Atlanta  was  a 
matter  of  expediency.    They  are  all  flourishing  towns,  the  last 
one  showing  promise  of  metropolitan  development. 

Population  of  Metropolitan  Centers  in  America 

Centers  1900  1910  1920 

Baltimore 577,670  663,810  787,458 

Boston 1,249,504  1,531,138  1,772,254 

Chicago 1,837,987  2,455,942  3,178,924 

Cincinnati 495,979  567,876  606,850 

Cleveland    420,020  622,571  925,720 

Kansas  City 228,235  369,276  477,354 

Minneapolis-St.  Paul 372,009  526,256  629,216 

New  York 4,607,804  6,566,859  7,910,415 

Philadelphia 1,623,149  1,983,306  2,407,234 

St.  Louis 649,711  828,733  952,012 

San  Francisco-Oakland.. ..     473,073  686,873  891,477 

The  figures  given  here  are  for  the  Metropolitan  district — 
that  is,  the  city  proper  and  adjacent  urban  territory.  The  1910 
items  are  taken  from  the  census  of  1920. 

17.  American  statistics  of  occupations  have  all  been  worked 
over  and  have  proved  interesting,  but  they  are  too  defective  to 
be  relied  upon. 

1 8.  In   1914  Detroit  did  not  even  put  in  a  claim  for  a 
Federal  Reserve  Bank,  though  thirty-seven  other  cities  did.    And 
Pittsburgh's  plea   fell   with   a  thud   when   rediscounting    (the 
evidence  of  performing  banking  services  for  the  surrounding 
district)    was  considered.     See  Location  of  Reserve  Districts 
in  the  United  States,  Senate  Document  485,  63d  Congress,  2d 
Session  (1914),  p.  282  b. 


METROPOLITAN  ECONOMY— AMERICA 


19.     Data  of  Nine  Federal  Reserve  Districts. 


339 


Square 
Miles 
(OOO's) 

Population 
in  1910 
(00,000's) 

Capital  and 
Surplus  of 
National 
Banks,  Dec. 
31,  1914 
/  000,000's  \ 
\  of  Dollars  / 

Capital  and 
Surplus  of 
National 
Banks,  June 
30,  1921 
/  000,000's  \ 
V  of  Dollars  / 

District 


Boston 62  66  162  264 

New  York 48  91  331  898 

Philadelphia 40  79  208  288 

Cleveland 73  83  202  371 

Chicago 171  123  220  475 

St.  Louis 195  87  92  150 

Minneapolis    (  T  w  i  n 

Cities) 433  52  82  118 

Kansas  City 451  57  93  150 

San  Francisco 684  51  131  243 

20.  See  G.  S.  Callender,  Selections  from  the  Economic  His- 
tory of  the  United  States  (1909),  p.  380. 

21.  In  the  writing  of  this  section,  I  am  under  heavy  obliga- 
tions to  Miss  M.  L.  Hartsough,  who  has  written  a  master's 
thesis  on  the  subject  (University  of  Minnesota,  1921). 

22.  W.    W.    Folwell,    A    History    of    Minnesota,    vol.    I 
(1921),  pp.  219,  228.     Strictly  speaking,  it  was  St.  Anthony 
that  got  its  start  at  this  time,  Minneapolis  developing  on  the 
other  (west)  side  of  the  river  a  little  later.     In  1872  the  two 
joined  to  form  one  municipal  unit. 

23.  See  above,  p.  259. 

24.  At  present  (1922)  the  Stock  Exchange  is  a  corporation 
with  officials  in  control,  existing  as  a  shell,  without  office  or 
trading  floor,  but  ready  to  function  when  the  time  comes.     It 
has   dealt    in   only   local   securities,    chiefly  of    industrial   cor- 
porations. 

25.  F.    J.    Turner,    The    Frontier    in    American    History 
(1920),  p.  23 

26.  This  does  not  rule  out  integration  in  certain  lines  of 
business  such  as  that  of  the  United  States  Steel  Corporation. 
See  below,  p.  315. 


340    INTRODUCTION  TO  ECONOMIC  HISTORY 

27.  When  the  "Pittsburgh  plus"  rates  have  been  altered. 

28.  If  we  keep  the  two  distinct,  then  it  becomes  apparent 
that  the  stages  of  Karl  Biicher  (The  Evolution  of  Industry), 
domestic,  town,  and  national  economy,  are  illogical.     Domes- 
tic economy  is  private  economy,  town  economy  is  public  econ- 
omy, and,  as  will  be  shown  below,  national  economy  is  political 
rather  than  economic. 

29.  The  first  type  is  found  in  the  history  of  ancient  Greece 
and  Rome  and  partly  in  medieval  Italy;  the  second  in  the  his- 
tory of  western  European  peoples. 

30.  See  G.  Schmoller,   "Studien  fiber  die  wirtschaftliche 
Politik  Friedrichs  des  Grossen,"  in  Jahrbuch  fur  Gesetzgebung, 
etc.  (1884,  1886,  1887),  and  The  Mercantile  System  (ed.  by 
Sir  W.  J.  Ashley,    1896)  ;   K.   Biicher,   Die  Entstehung  der 
Volkswirtschaft    (1893),    and    Industrial  Evolution    (ed.    by 
S.  M.  Wickett,  1901),  chap,  III. 


THE  END 


INDEX 


Abraham,  25,  32-33,  35 
SEgean  civilization,  113 
Agriculture,  9,  35~36>  38-39,  44- 

45,  68-69,  75,  87-88,  103,  127, 

229,  271,  297-298,  307,  309 
Alani,  26 
Albany    (N.   Y.),    186,    223,   227, 

231,  234 

Alexander  the  Great,  33,  114,  117 
Alexandria,    117,    170,    192,    207, 

276 

Algeria,  28-29,  37,  52,  95 
Amalfi,  H2 
America,  117 

Southern  States  of,  218,  224,  289, 

298-299 
Amsterdam,    181,    190,    192,    194, 

208,  245,  281 
Ancient  period,  113 
Angelica,  31 
Anglo-Saxons,   51,  71,  76,  89,  90, 

101,   112 
Animal  culture,  24-34,  55'  59»  *>3» 

65,    68,    70,   79 

Antioch,    134,   164,    184,   207,   219 
Antwerp,  190,  192,  208,  236 
Apprentices,    144-145,    153,     165, 

168,  211,  216 
Arabs,   25,   48 
Arabs    (so-called),   52 
Archaeology,    7,    18 
Architecture,    51 
Argos,   in 
Art,    16,    20,    84,    143,    162,    166, 

170,  173,  325,  327 
Artevelde,  James  van,  148-149 

Philip  van,  149 
Artisans,    119,   146 
Associations,  122,   129-132,  326 


Assyria,  78 

Athens,  78,  90-91,  in,  115,  118, 

134,  152,  154,  I70-i7i>  207 
Atlanta,  338 
Atticus,    145-146 
Augsburg,    140-141 
Australia,   3,    10,    13,   18,   21,    32, 

39,  43,   173 

Automobile,    136,    219,    220,    224, 
294 


B 


Babylon,  90,  107,  in,  145,  207 
Babylonia,  51,  60,  69,  78,  90 
Bahimas,   30,  67,  71 
Bailiff,   74,   82,    160 
Baltimore,  199,  220,  223-224,  228, 

232,  286,  290-293,  330,  338 
Bancroft,  6 
Bankers,   208,   237,    268,    328 

private,   245-247,   251-252,   279 
Bank,   First   U.   S.,   252,   291-292, 

336 

Bank  of  England,  250-253 
Banks,  243-245,  264-266,  269,  279, 

290,  292,  305-307,  311,  312 
branch,  252-254,  257,  265,  272, 

279,  309-310 

chain  of,  259-260,   305-306 
Bank,  Second  U.  S.,  252,  292,  336 
Bantus,  29,  66,  88 
Barbon,  N.,  202,  257 
Barcelona,  133 
Basel,  107 
Bazaar,  106 
Bedouins,  26 

Beer,    109,   122,    154,   156,   160 
Beowulf,  84,  88 
Berbers,  55 
Bergen,   130,   131 


342 


INDEX 


Berlin,   113,   206 

Beverley,   155 

Bill  of  Exchange,  189,  191,  246, 
274 

Birmingham,  213,  228-229,  239 

Black  Death,  163 

Blacksmith,    56,   80,    136 

Boccaccio,    164 

Bologna,  169 

Bongos,   59 

Books,   195,  325 

Bordeaux,    112 

Borough,   89-90,   102,   174 
-thegns,  125 

Boston,  117,  155,  186,  191,  195, 
199,  215-216,  226-228,  230- 
231,  234,  237,  279,  286  f., 
292-293,  298,  302-303,  310- 
311,  316,  325,  330,  338-339 

Bourse,   190 

Brazil,   3 

Bremen,   131,   192 

Bridges,  121,  133,  222 

Bristol,  186,  223,  225-226 

Brockton,  215 

Brokers,  164,  189,  206,  237,  246- 
249,  268-269 

Bruges,  130-131,  135,  148,  175, 
190,  195,  208 

Biicher,  44 

Buffalo  (N.  Y.),  186,  231,  234, 
286,  310 

Burgundians,  51 

Bushmen,  8,  19 


Cable,   238,  241 

Cn-sar,    Julius,    36 

California,  9-10,   18 

Cambridge    (Eng.),    125 

Canaan,   78,   86 

Canals,    205,    225-228,    240,    242, 

282,  284,  286,  290 
Capital,    122,    168,    194.,    197,  204- 

205,    218,    239,    244,    251-353, 

259,  267,  271,  295 
Capua,  134 
Carcasonne,  124-125 
Carthage,   107,  114,   117,  183,  207 


Cattle,  24-26,  29-30,  37,  40,  55, 
59,  63,  67-69,  73,  81,  85,  87- 
88,  98,  119,  127,  142,  183,  230, 
287,  301,  310,  332-333 

Cave-men,  7-8,  25,  45 

Caves,    16 

Central  reserve  city,  255-256,  285 

Ceylon,  7,  10,  192 

Chamber  of  Commerce,  273,  297, 
331-332 

Charity,  168-169 

Chicago,  184,  186,  209-210,  220, 
230,  232,  234,  237-238,  256, 
266,  268,  284-285,  289,  291  f., 
302  f.,  307,  311,  322,  325, 

.  338-339 
Chichester,    112 

Chiefs,  59,  62,  72,  82,  86,  88,  100 
Child,  Sir  Josiah,  202 
China,  27,  33,   51,   53,   55,  61,  67, 

78,     89,     105,     113-114,     127, 

173,  321 

Church,   56,  83,  107,  119,  323 
Cincinnati,  227,  234,  286,  292-293, 

297,  330,  338 
City,    87-91,    no,    116,    122,    183, 

185,  295 

Civilization,    50-51,    132,   169 
Clan,  30,  40,  49 
Cleveland,  227,  237,  286,  292-293, 

297,   325,   327,  338-339 
Cloth,  80,  105,  109,  131,  134-135, 
140,    156,    197,   215,   288,    302 
Clothes,  21,  209,  293 
Cloth   manufacture,   134 

merchants,  138,  148-149 
Cnossus,  in,  113 
Coblenz,  107,  113 
Codes,  maritime,  132 
Coins,  133 

Collectional  economy,  3-22,  39, 
44,  .66,  315 

pursuits,  24,  39,  42 
Collectors,  4 

lower  and  higher,  18,  19 
Cologne,  113,  124,  129,  147,  150 
Combination,   260-263 
Commendation,  72,  75 
Common  carrier,  188,  221,  239 
Commons  of  village,  53,  119 
Competition,  199 


INDEX 


343 


Congo,  14,  53,  66 
Constantinople,  219,  272,  300 
Copper,     18,     122,     134-135,     310, 

333 

Corinth,    in,    164,    169,    183,    207 
Cornmongers,   122-123,   144,   153- 

154 

Cotton,   215 

Court  of  village,  73,  78,  82,  86 
Crafts,   135-139 
Creameries,  310 
Credit,  197,  248,  267 
Crisis,  250,  254,  271 
Croton,    in 
Cultural    attainments,    15-19,   39- 

42,  79-86,  161-170,  322-329 
Cultural    nomadic   economy,    23- 

48,   62,   66,   no,   315 
Customs,   16 

duties,    131,   242 
Cutlery   industry,   212-213,   240 

D 

Dakota,  North,  3,   306,  309,   311- 

312 

Dallas,  256,  338 
Dante,   126 

Dantzig,   107,   130-131,  198 
Demesne,  74,  76,  78,  100 
Denver,  333 
Detroit,    184,    186,    286,    294-295, 

327,  338 
DiciEarchus,    44 
Diggers,    7,   9 
Dinant,   135 
Dinkas,   37 
Disease,  12,  14,  16,  31-32,  49,  67, 

163,   324 

Domesday  Book,   76 
Domestication  of  animals,  24-34, 

44 

Doukhobors,    24 
Dramas,    166-167 
Drapers,    123,    141,    157 
Dublin,   265 
Duluth,   192,  309-310,  312,  315 

E 

East    India    Company,    192,    281, 
336 


Economic  cultures,  43 
history,   3,   113 
interpretation    of    history,    84, 

93,  150-151,  336 
regulation,  152 

Economy,  5,  20 
domestic,   340 

national,   318-322,    334,   340 
private,    314-316,    340 
public,   314-316,  340 

Edinburgh,  265 

Education,   326 

Efficiency  (economic),  17,  52, 
161,  204-205,  271 

Egibi,   145 

Egypt,  5,  25,  28,  45,  51,  60,  64, 
69,  78,  86,  89,  in,  166,  207 

Employment,  division  of,  41-42, 
80 

England,  51,  53,  70,  72,  78,  80, 
89,  112,  125,  132-133,  141, 
148,  154,  183,  196,  202,  221, 
228,  234,  236,  253,  306,  321. 
See  London 

Environment,  40,  45,  61,  97 

Erie  Canal,  226-227,  282 

Eskimo,  4,  8-10,  13,  19,  94 

Ethiopia,  37 

Eupatrids,  78 

Exchange,  foreign  and  domestic, 
268,  270 

Exchanges,  189  f.  See  Stock  ex- 
change 

Exeter,   125 

Express   companies,    234-235 

Extended  trade,  194-195,  209,  243, 
247,  270 


Factory,  216,  318 

Fairs,    132,  141,    160,    187,  274 

Fallow,    69 

Fall   River,  215 

Family,  40,  58-59,  73,  82-83,  98, 
134,  167 

Famine,  49,  73 

Fargo    (N.   D.),   309 

Fashions,   325 

Federal  Reserve  system,  256—257, 
266,  270,  285-286,  292-293, 
295-297,  306-307,  33»,  335 


344 


INDEX 


Feudalism,  61,  72-74,  78 
Fields,  55-56,  59,  63-64,  69-70 
Financial   organization,  243-269 
Financiers,  145,  206,  227,  260-263 
Fire  insurance,   257-258 
Fish,  9,  14,  81,  119,  122,  127,  131, 

223,  229-230,  333 

Fishing,  4,  8-9,  u,  14,  17,  32,  38 
Fishmongers,   123,  152 
Flemish  Hanse  of  London,  154 
Florence,  no,  112,  121,  126,  128, 

135,   138,   145,   H7-I48,   151- 

152,    163,    166,    168-169,    171, 

189,  200,  208,  245 
Flour  milling,  210,  300-301,  312- 

313 
Food,   6,  8-9,    11-15,    I8,   23,   31, 

34,  39,  153-154,  199,  218,  229, 

239,  324 
Forests,  n 
France,  51,  56,  100,  132-133,  148- 

149,    154,   202,   210-211,    221, 

224-225,    228,    230,    234,    236, 

242,  253,  281-282.     See  Paris 
Frankfort   (-am-M.),  121,  190 
Franklin,  Benjamin,  237 
Freedmen,  82,  140-141,  144 
Freemen,  62,  75,  78,  93 
Free  trade,  157,  202-203 
French  Revolution,  272 
Fruit,  8-9,  15,  24,  140,  314,  324 
Fuggers,   141 


G 


Gambling,  62,  82 

Garden,   53 

Gary,   118,  315 

Gauls,  65,  72,  88,  112 

Genesee  Valley,  199,  290 

Genesis,  79 

Genoa,  112,  208,  245 

Geographical  influence,  4,   10,  20 

Germany,  6-7,  36,   51,  53,  56,  58, 

69,  72,  83,  89,  loo,  113, 116-117, 

126,    135,   224,  228,   234,   236, 

238,  244,  271,  322 
Ghent,     135,      137-138,     H7-I49, 

168-169 
Ghibellines,  126 


Gild,  107,  125,  136-139,  146,  148, 
I5I-I53,  157-158,  165-168, 
172,  175,  177,  J79,  201,  212, 
236,  323 

Gild    regulation,    152-153 

Giraldus    Cambrensis,    6 

Glasgow,  322,  233 

Glut,  195 

Goats,  24,  30,  37,  63,  68 

Gods    (deities),   35,   81,   87 

Gold,  135,  142,  162,  201,  218,  254, 
263,  267-268 

Gold  Coast,  76,  82,  89,  99 

Goldsmiths,  140,   153,  245,  251 

Gomorrah,   164 

Goths,  51 

Grain,  7,  29,  36-37,  39,  50,  64- 
65,  74,  80-8 1,  109,  119,  122, 
153,  160,  169,  183,  191,  198, 
287,  301,  304,  310,  313,  314, 

332-333 
Granary,     80,      127,     198.       See 

storage 
Greeks,    51,    69,   78,   87,   90,    in, 

116,    123,   133,   137,   144,   147, 

166,  174,  179,  340 
Gresham,    Sir   Thomas,    190-191, 

_  245,  272 

Grindstones,  74,   160 
Guelfs,  126 
Guy,  Thomas,  249 
Gypsiei,   36 


H 

Hamburg,   113,   131,   190 

Hamlets,  58-59,  61 

Handicraft,      135-139,     151.     See 

manufacture 
Hanseatic   League,    129-132,    154, 

171 

Harnden,  W.  F.,  234-235 
Harriman,  E.  H.,  232 
Hartford,  258 
Hay,  63 
Health,  18,  67 
Heap-village,  53 
Helots,   71 
Hereros,    29-30 
Herodotus,  6,  26 
Hindus,  84 


INDEX 


345 


Hinterland,  185,  194,  195-196, 
199,  201,  207,  209  f.,  221,  241, 
243-244,  247,  251,  253-255, 
271,  288,  306-307 

Historiography,   no 

History,  5,  79,  166 

Homer,  7 

Homesteads,  scattered,  50,  61,  97, 
187,  324 

Honey,  7-8,  17,  29,  39 

Horde,  Golden,  33,  40 

Horn,  Andrew,   143 

Horses,  25,  27-29,  31,  43,  51,  69, 
2l6,  221,  236 

Hosiery,  209—211 

Hospital,  129,  249,  323 

Houses,  36,  52-53,  55,  72-73,  80, 
85,  105-107,  118,  127,  181 

Huckster,  143-144 

Humor,  8 

Hungarians,   89 

Huns,  26-27,   32,  46 

Hunting,  4,  9,  14,  17,  27,  32,  37, 

7i 
Hunting  and  fishing.     See  collec- 

tional  economy  and  collectors 
Hyksos,  25 


Iceland,  IT,  97 
Iliad,  51,  84,  87 
India,  7,  27,  30,  37,  55,  58,  79,  96, 

113-114,  173,   192 
Indians,   North  American,   9,   14, 

18-19,  32,  18,47,  55,66,82,94, 

282 

Individualism,  85,  165,  172,  275 
Industrial    Revolution,    216,    218, 

302 

Inheritance,    56 
Insurance,   257-259,   269 
Inter-metropolitan   relations,  194, 

239,  241,   243,  262,   264,   267, 

270,  290 
Intra-metropolitan  relations,  194, 

239,  241,  243,  262 
Ireland,  65,  193,  212,  265 
Iron,    18,   80,    122,    131,    134,    160, 

214.  276,  293,  295,  333 


Irrigation,  60,  69 

Italy,  in,  116,  126,  144,  236 


Jacquerie,  149 

Japan,  3,  58,  100 

Jenghis  Khan,  33,  44 

Jews,  16,  25,  32-33,  35,  84,  86-87, 

I2i,    136,    145-147,    164,    197, 

244,  316 

Joint-stock  bank,  253-255,  265 
Joint-stock  company,  192-193,  274 
Joint-stock  insurance  co.,  257 
Jurisdiction,  grant  of,  73,  75,  79, 


K 


Kansas   City,  210,  285,   292,  297, 

325,  337-339 
Kelts,  51,  59,  65,  112 
Kiev,  121 

Kirghiz,  26,  32,  37,  52 
Knights,  89,  125 
Konigsberg,  117 


Labor,   204 

division  of,   15,  41-42,   318-319 
Laborers,  52,  58,  74,  127,  134,  136, 

139,  147,  168,  211,  213,  329 
Labor  market,  333 
Laissez-faire,  241-242,  261,  319 
Lando,  Michele  di,  148 
Lapps,  10,  19,  30-31 
Law   merchant,   132 
Lawrence    (Mass.),  215 
Leather,  25,  105,  122 
Leicester,  127 
Lexington,  155 
Life  insurance,  258 
Lisbon,   107,   119,   121 
Liverpool,  225,  233-234,  238,  264- 

265,  284 
Liverymen,    139 
Localization,   136 
Locust-eaters,  6 
Lombards,  52,  136,  145 
Lombard  Street,  136,  189,  191,  269 


346 


INDEX 


London,  107,  112,  125,  129,  131,  133, 
136-138,  140-141,  147,  150- 
154,  160,  163,  168-169,  !8i- 
184,  1 8 6,  189  f.,  202-204,  206, 
208  f.,  220  f.,  228  f.,  236  f., 
240-241,  244  f.,  251  f.,  263  f., 
267,  274,  281,  284,  289,  312 
government  of,  140,  150-151 

Lowell,  215,  231 

Liibeck,    113,    123,    128,    130-131, 
169 

Lumbering,    11-12,   307 

Lynn,   199,   215 

Lyon,   112,   190,   199 

M 

Macadam,  J.  L.,  222—224 

Madagascar,  8,  10,  59,  63,  69,  81 

Magyars,  52 

Mail-order    house,    235 

Mainz,  113,  184 

Management,  204 

Manchester,    212,   217,    225,   264- 

265 
-Liverpool,   196,  214,  216,  225- 

226,    229,    233,    264-266 
Manor,  74,  76,  78,  89,  92,  98,  100, 

102,  123,  158,  180 
Manufacture,   15,   23,  40,   48,   51, 

105,    107,    109,    I2I-I22,    133   f., 

156,    174-175,     180,    203-204, 

209  f.,  241,  264,  294,  298,  300- 

302 

decentralization  of,  210  f.,  302 
localization  of,   209  f. 
stages  of,  215-216,  276 
Marcel,  Etienne,  149 
Marco   Polo,   6,    127 
Marine  insurance,  258 
Market,  186  f.,  196,  204,  209-210, 

238,  270,  273,  298,   302,   312- 

313,  318-319,  332 
place,   56,   8 r,  85,  90,   loo,   104- 

105,    118-119,    I2I«    I4I>    160, 

173,  181 
Marriage,  41 
Marseille,    116,   275 
Massagctae,  26 
Masters,  small,  139,  144,  216 
Metcalfe,  John,  222 
Metropolis,  88,  156,  181  f.,  206 


Metropolitan  boundaries,  295-297 

"district,"  329,  338 

economy,  181-340 

economy,  definition  of,  186,  314 

revolt,  311-312 

rivalry,  281-292 

Meat  packing,  210,  293,  312,  315 
Medici  family,   143 
Megalopolis,   118 
Memphis,  107,  in,  113 
Mercantilism,    200-204,    217-218, 

275,  3*9 
Mercers,   123,   135,   140,  178,  191, 

217 

Merchant  hall,  105-106 
Merchants,  122-125,  134,  140-143, 

145,   147,   151,   154,   166,   176, 

198,    217-218,    225,    236-237, 

239,  268,  288,  305 
Middle  Ages,  113 
Middleman,  91,  105,  154,  312 
Middlemen,  money,  244,  260-263 
Migration,  33,  43,  95 
Milk,  27,  29-30,  34,  39,  45-46,  50, 

65,  67,  172 
Millstones,  80,  122 
Milwaukee,  186,  258,  303 
Mining,  n,  17,  122,  140,  298,  307, 

310 

Minneapolis,  117,  210,  299  f.,  339 

-St.  Paul,  216,  299-314,  338-339 

Monastery,    62,   83,   86,   100,   158, 

1 68,  174,  220 
Money  changers,  133,  145,  244 

lender,    137,    140,    145-146,    245 
Mongols,  32-33 
Monopoly,  132,  157,  203,  311 
Montpelier,  169 

Montreal,    66,    199,    282-284,    303 
Moors,  72 
Morals,  20,   132 
Morgan,  J.  P.,  232,  260,  262-263, 

272,  327 

Morneweg,   Bertram,    128-129 
Music,   84 
Mycene,  in,  113 

N 

Negroes,  29,   37,   59,   66,  71,  82 
New    England,    9,    55,    102,    214 
230,  288-289 


INDEX 


347 


New  Guinea,  7,  13,  53,  58 

New  Orleans,  227-228,  282-285, 
293,  299,  301,  330 

Newspapers,  298,   325 

New  York,  155,  184,  186,  199,  209, 
216,  220,  223-224,  227,  230  f., 
237-238,  248,  256,  260  f.,  279, 
281  f.,  289  f.,  302-303,  305, 
307,  310,  312,  325-326,  330- 

331,  338-339 
New  Zealand,  21 
Nippur,  107,  in,  113 
Nobles,  62,  83,  128,  139-140,  147, 

150,  158,  187,  192,  194,  220 
Nomads,  23-48 

hunting,  42 

mounted,  28,  32,  44 

pastoral,  25,  27,  34,  36,  40,  42, 
44 

planting,    25,    34-39,    42 
Non-Partisan  League,  311-312 
North,  Sir  Dudley,  202 
Northwest,  American,  64,  229-314 
Norway,  n 
Nottingham,  210-211 
Nova  Scotia,  56 
Novgorod,  122,  130-131 


O 

Odyssey,  28,  84,   87 
Oleron,    132 


Parcel   dispatch,   234-235 
post,  234-236,   277 

Paris,  112,  133,  149,  170,  178,  186, 
189,  193-194,  199,  206,  209, 
216,  221,  225,  230,  238,  246, 
248,  253,  267,  274,  281,  289 

Pastures,  24,  31-32,  52,  63,  80 

Patricians,  125-128,  139-140,  145, 
149-150,  176 

Patrons  of  art  and  science,  161, 
325 

Peace,  59,  67-68 

Peasant,    68,    105,    127,    153,    163, 

165,   187 
revolts,  74,  149-150 


Philadelphia,  118,  155,  199,  221, 
223-224,  227-228,  232,  234, 
237-238,  252,  258,  279,  286  f., 
290  f.,  302,  330,  338-339 

Phoenicia,  78,  in,  114,  185 

Pigs,  7-8,  1 6,  24,  32,  37,  127 

Pirates,  129,  131-132 

Pisa,  no,  112 

Pitch,  80,   122 

Pittsburgh,  171,  184,  223,  227,  291, 

294-295,  315.  327,  338 
plus,  333-334,  34O 

Plant  culture,  34-39,  59,  63-65,  69- 
70,  79 

Plebeians,    116,    125,   127 

Plow,   69,  71,    160 

Policy,    metropolitan,    200,    241- 

243,  261-262 
national,  200,  241,  243 

Political  organization,  81-82,  86- 
92,  no,  133,  147  f.,  316-322, 

335 

Polyandry,  30,  41 
Polygyny,  41 
Pompeii,  136 

Poor  (poverty),  128,  168,  193 
Population,  67-68,  161,  181,  323 

density  of,  17,  161 
Portland   (Maine),  186 
Portugal,  210 

Post  office,  205,  235-238,  241,  320 
Pottery,   51,  80,    134 
Prague,  121 
Procreation,  21 
Property,   40,    92 
Providence    (R.   I.),  231 
Price  regulation,   154 
Prices,   169,  285 
Priest,  78,  83 

Psychological  equipment,  4-5 
Pullman,  118 
Puteoli,  134,  141 


Quebec,  56 


Q 


K 


Railroads,  188,  205,  228-232,  240, 
242,  269,  271,  286,  288-289, 
290-291.  299,  303-304,  315, 
33° 


348 


INDEX 


Railroad,  underground,  219-220 

Ranches,  43 

Ratzel,  6 

Rechabites,  35 

Reindeer,  9,  10,  31 

Religion,  3,   15-16,  83-84,  86,  91, 

164,  193,  3*4 
Rent,  176,  271 

Reserve    city,    255-256,    279,    292 
Retail,  132,  146,  152,  187,  215,  235, 

268-269,  277,  305,  314 
Richmond,  256,   338 
Roads,    53,    133,   205-206,   220  f., 

236,  240,  242,  286,  290 
Rochester  (N.  Y.),  156 
Rome,   27,   36,   51,   64-65,   69,   78, 

83,    90-91,    IO7,    III-II2,    Il6- 

117,    119,    123,    126-127,    129, 

134-137,    139,    145.    147.   153. 

163,    166,    169,    174,   179,   206, 

219-221,    340 
Royal     Exchange,     190-191,     197, 

247-248 
Russia,  31-32,  37,  52-53,  93,  102, 

121,  135,  167,   173,  272 


Sachs,  Hans,  167 
Saddles,   138 
St.  Albans,  112 
St.  Godric,  143-144,  165 
St.  Louis,  184,  234,  256,  266-267, 
285,   292,   297,    300,    303-304, 

3",    33i,    333,    337-339 
St.  Omer   (France),  129,  136-137, 

175 

St.  Paul,  299  f. 
Salem,  186 
Salisbury,  120 
Salt,  12,  80,  122,  153 
Samarkand,    33 
San  Francisco,  238,  286,  292,  297, 

338-339 

Sanitation,  85,    163,  324 
Savages,   3 
Saxons,    129 
Scandinavia,    61 
Scarcity,  153,  199 
Science,    39,    166,    325,    327 
Scotland,    212,    222-223,    2<>5 


Seattle,  286,  303 

Serfs,  75-76,  101,  133 

Settled  village  economy,  49-103 

Sex,  13,  21,  41,  84,  164 

Sheep,  24-26,  30,  37,  40,  55,  59, 
63,  68,  73,  87,  98 

Sheffield,   212-213,   239 

Ships,    141-142 

Shoemakers,  138,  167,  177 

Shoes,  80,  109,  135,  138,  215,  288, 
293,  301-302,  311 

Shops,  119,   121,  141,  152,  219 

Sidon,  in,  114,  207 

Silk  industry,  210-212 

Silver,  134-135,  162,  201,  218,  254, 
263 

Skallagrim,    n 

Slaves,  34-35,  37,  41,  62,  64,  71, 
75,  78,  82,  101,  123,  140,  142, 
144,  146 

Slavs,  52,  58,  72,  89,  117-118 

Smallpox,  163 

Social    classes,    139    f.      See    ar- 
tisans,    freedmen,     freemen, 
merchants,    patricians,   serfs, 
slaves,  traders 
intercourse,   162 

Socialism,    168,   319 

Socialists,  151,  262 

Sodom,   164 

Soil,  exhaustion  of,  49,  97 
fertility  of,  53,  65,  69,  71,  97 

Spain,  51,  64,  72,  129,  154,  174, 
210,  236,  282,  322 

Sparta,   90,   in 

Specialization,  188,  239,  305,  313- 

3H 

Speculation,  247-250 
Spicers,  123,  135,  140 
Spices,  80,   109,  122,   189 
State,   no,   132,  200,  270,  273 
Steamships,     230,     232-234,     240, 

242,    269,    287-288,    303,    315, 

318 
Stock  exchange,  191,  247-249,  269, 

307,  339 

Storage,  14-15,  23,  39,  79,  89,  106, 
181,  196,  204-205,  255,  304- 

305,   315 

Stores,  119,  121,  152,  219,  310-311 
Strabo,  6,  26,  88 


INDEX 


349 


Suburbs,  58,  119 
Sybaris,  in 
Syracuse  (N.  Y.),  156 
Syracuse  (Sicily),  116,  183 


Tacitus,  6 

Tar,  80 

Tartars,  37,  72 

Taxes,  91,  133,  145,  314 

Tea,  68 

Tegea,   90,   118 

Telegraph,  205,  238-239,  241,  271, 

289 

Telford,  Thomas,  222 
Temples,  55,  83,  118,  166,  174-175, 

323 

Tents,   16,   18,  35,   52 
Terminology,   91,   102-102,   185 
Teutonic  Order,  117 
Thebes   (Egypt),  107,  in 
Thorn,   117 

Three-field    system,   70 
Thurii,   116 
Tin,   122,   131 
Tiryns,  in 
Toledo,  286 
Tolls,  town,  133,  152 
Toulouse,  113 
Tours,   133 
Town  area,  107,  109 

charters,  123-124,  152,   180 

commercial  and  industrial,  133- 
156 

commercial  phase  of,  121-133 

definition  of,  109 

economic,  104—110 

economy,  79,  86,  91,  94,  104- 
180,  186-187,  196-197,  205, 
207,  212,  219,  229,  246,  271, 
275,  291,  298,  313,  315,  319, 
321,  333-326,  332,  334.  340 

factions,    126,    128,   176 

leagues,    154 

planning,    118-121,    174 

political,    114 

regulations,   132,    152-155 

strife,    147-153 


Towns,  29,  58,  79,  83,  86,  95,  102, 
173-174,    181,    185-187,    201, 
204,    219-220,   229,   271,   305, 
309-310,  320,  324-326,  332 
created,  114-119 
ecclesiastical,   124 
form  of,  119-131 
founders  of,   117-118 
Townships,  103 
Towns  in  America,   155-156 
Towns,  location  of,  107 

manufacturing,     215-216,     294, 

327 

origin  of,  174-175 
Town   uprisings,   124 
Trade,   15,   33-34,  40,  44,   80-82, 
104-110,    121-133,    140,    156- 
161,    165,    169-170,    176-177, 
183,    186  f. 
freedom  of,  123 
Traders,  specialized,  91,  105-107, 

119,  132 

Transportation,  205,  213,  218-243, 
244,    270,   278,   294,    302-304, 

3i5 

Tribe,  41,  86-87 

Trimalchio  the  merchant,  141-143 
Troy    (N.   Y.),   in 
Turks,    71 
Turnpike,  221—223 
Twin  Cities,  266,  285,   292,  299- 
314.    See  Minneapolis-St.  Paul 
Two-field  system,  70 
Tyre,  m,  114,  122,  183,  207 

U 

U.  S.  Steel  Corporation,  261,  315, 

332,  339 
Universities,    166,    236,    323,    326, 

328 
Ur,   107,  in 

V 

Vandals,  26,  112 

Veddahs,   7,    18 

Vegetables,  8-9,  65,  140,  324 

Veii,    in 

Venice,  112,  126,  166,  169,  176,  179, 

200,  208,  245 
Vermin,  85 
Vienna,  121 


350 


INDEX 


Vienne,  88,  112 

Villa,  74-75,   100,  158 

Village,  17,  30,  34,  38,  104-114, 
121,  156-161,  171,  175,  185, 
187,  207,  220,  271,  300,  320- 

321,    324 

dependent,  70-79 

economy,  49-103,  no,  112-113, 
161,  171,  315,  334 

elder,   72,   82 

free,  61-70,  82 

industrial,  94 

market,  105,  107 

self-sufficiency  of,  81 

urban,  86-92,  102,  104,  114,  173, 

176 

Villages,  agglomeration  of,  90-91 
Villeins,  76,  78,  93,  160 
Vintners,  122,  135,  138,  140,  166 
Vitamines,  12 

W 

Wage*,  138,  211-213,  271 

Wales,  61,  65,  100 

Wall    Street,    155,   248,   260,   269, 

272,  336 
War,  18,  26-28,  3J,  36,  40-41,  53, 

55,    59,   64-65,   68,  70-72,  82, 

84,  86,  88-89,  91,  97,  104,  116, 

135,    133 


Warehouses,   121,   197,  305.     See 

storage 
Washington     (D.    C.),    237-238, 

323 

Weavers,  135,  138 
Weights  and  measures,  133,  152 
Welland  Canal,  282 
Welser  family,  140 
Whittington,  Dick,  140-141 
Wholesale,  187  f.,  215 
Wholesaler,    206,   208,   239,   268- 

269,  305,  314 
Winchester,    108,    112,    133,    160, 

185 
Wine,   36,   67,  74,    109,   122,   127, 

142,  156,  160 
Winnipeg,   300,  303 
Wisby,  129,  132 
Woman,  8,  15,  18,  27,  34-35,  37- 

38,  41-42,  64-66,   68,   80,  85, 

88,   105-106,   143,  218 
Wool,  3,  25,  29,  33,  122,  131,  156, 

314 

Worcester  (Mass.),  215,  231,  316 
World  economy,  334,  336 
World   market,  238,   336 
state,  320 


York,  112,  184,  221 
i    Ypres,  135,   148,   169 


THE  END 


Date  Due 


APR  6  •» 

RPP  6  -59 

APR  6  >sg 

•-<=.  3?    *S 

ftPfi  1  *>  "^j't 

FEB  4  'f» 

"FP  1  n 

1964 

JAN29M 

56d  » 

MAY  14 

1964 

igfvy 

i\'.:-,  *     j.    ^ 

'  3  B  4 

DEC  2 

71998 

trtr 

f) 

UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


A  001  367441  1 


G7 


f-ras,  N.S.B. 

An  introduction  to  economic 
history . 


